How to add a car to your insurance policy
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According to the U.S. Department of Transportation, a whopping 276 million vehicles were registered in the country in 2020. Minus a few dips following the Great Recession, this figure has risen steadily since 1990.
If you are one of the many Americans who’s planning on adding another car to your household, you might wonder how to get it covered. Most insurance companies allow you to have more than one vehicle on your policy. In fact, many will offer you a multi-car discount if you do. Bankrate explains how to add a car to your policy so that you can ensure you are protected financially and, depending on your coverage, that your new vehicle is covered, too.
How to add another car to your insurance policy
You can add a car to your existing insurance policy in two main ways: by contacting your agent or insurance company or by adding it yourself through your company’s online portal or mobile app (if your company has these electronic options).
If you prefer your agent or company to add the vehicle for you, you may be able to give them a call or stop into the office with your vehicle information and tell them the changes you’d like to make to your policy.
If you’d like to add the vehicle yourself online, log into your policy via your company’s online portal or mobile app and follow the steps provided. However, note that not all companies have online policy management capabilities. If your company doesn’t give you the option to make changes to your policy online, you will need to contact them to add the vehicle.
Whether you have your agent add your car to the policy or if you do it yourself, most insurance companies will provide you with proof of insurance shortly after the transaction, typically by emailing you an ID card.
What information do I need to add a car?
There is some basic information that you’ll need to give your insurance company to add a car to your policy, including:
- Vehicle identification number (VIN): You can find your VIN on the vehicle’s title or window sticker. If these aren’t available, look for it in the lower left-hand corner of your windshield or on the inside of your door.
- Registered owner’s information: If you register the vehicle in anyone’s name other than your own, you will likely need to add that driver to your policy, too.
- Vehicle safety features: Most of the time, your vehicle’s safety features will populate based on your VIN. Occasionally, however, your agent may ask you for detailed information about the type of anti-theft system your vehicle, which may lead to additional discount opportunities.
- Type of coverage: You will need to tell your insurance company what types and levels of coverage you’d like your new vehicle to carry.
- Usage information: Your insurance company will ask you how you plan on driving your vehicle. For instance, they may want to know if you are commuting and how many miles round trip it takes you to get to work. They may also ask for your current odometer reading.
- Lienholder or leasing company information: If you are financing or leasing your car, your insurance company will need your lender’s information to send them proof that your vehicle is covered.
Why should I add another car to my insurance policy?
Because most insurance companies offer a hefty multi-car discount, multi-car insurance policies are usually cheaper than insuring multiple vehicles on separate policies. There are times, however, when you might be unable to add another car to your policy. This is likely the case if you own more vehicles than the average person, as most companies have a limit to how many cars you can list on one policy. However, this limit generally varies by company.
Although you may qualify to get a multi-car discount for adding a vehicle to your existing policy, it’s important to consider the pros and cons when comparing multi-car and single-car policies.
|Multi-car policy||The more cars you add, the more you may save through multi-car discounts
Easier to manage all in one place
Pay one bill covering all vehicles on the policy
|The premium for all your vehicles will be due at the same time
You normally have to carry the same liability limits for all vehicles listed on the same policy
|Separate policies||Get separate bills and different payment dates
You can select different coverage for each vehicle
|May be more expensive to insure each vehicle separately
You will need to manage separate bills and due dates
Some insurance companies may not give you an option when it comes to insuring your vehicles on one policy or separate ones. If you are unsure of how to cover your additional vehicle, call your company or agent to discuss your options.
Does adding a car to my policy affect my rate?
Although you may qualify for a multi-car discount by adding a second vehicle to your policy, your overall car insurance rate will likely still increase. Multi-car discounts are among some of the most significant discounts offered to drivers by car insurance companies, but they’re typically not enough to negate the total premium your insurance company will charge to add a vehicle to your policy.
To ensure you get the best rate possible, most insurance professionals recommend that you shop around and compare quotes after certain life events, like buying a new car.
How to choose coverages when adding a car
The first step to choosing coverage for your additional car is to decide whether you need minimum coverage insurance or full coverage insurance. Most states require a minimum amount of liability insurance in order to legally drive.
The average cost of car insurance in the United States is $545 per year for minimum coverage and $1,771 per year for full coverage. Minimum coverage may be cheaper, but purchasing higher limits and full coverage has its benefits.
Minimum coverage insurance includes only the coverages required by your state, typically liability bodily injury and property damage and occasionally uninsured motorists coverage. This type of coverage pays for the damage you cause to someone and their vehicle if you are in an at-fault loss. Uninsured/underinsured motorists coverage pays you for your damages if you are hit by an uninsured or underinsured driver. If you cause an accident and damages are over your minimum coverage limits, you will have to pay the difference out of pocket.
Liability insurance will not pay for damages to your vehicle; you will need full coverage for that. Full coverage insurance includes liability plus comprehensive and collision insurance, which pays for damages to your own vehicle. Collision insurance covers damages to your vehicle from collisions, such as with another vehicle or an object. Comprehensive coverage pays for damages from weather, theft, fire, vandalism or striking an animal. If you have a loan or lease on your vehicle, you will likely be required to carry full coverage.
Depending on the car insurance company you choose, you may also have the choice of adding optional coverage types, such as emergency road service, gap insurance and rental reimbursement in case of a covered claim.
Frequently asked questions
Yes, adding a car to your car insurance policy will likely increase your rate, even if you purchased an insurance policy with one of the cheapest car insurance companies. Multi-car discounts may save you money, but these discounts won’t typically be able to completely outweigh the cost of an additional vehicle. For this reason, it may be helpful to shop for new insurance when you purchase another vehicle to ensure that your current company is giving you the best possible rate.
Many of the larger insurance companies allow you to add a vehicle to your policy through their website or even via their mobile app. Adding a vehicle online is convenient. However, adding a second car to your policy online may not always be advantageous. You may miss out on discounts or coverage options an experienced agent or representative could recommend.
Most states require you to have insurance in place before you can register your new vehicle. If you are financing or leasing your vehicle, you may also be required to show proof of insurance before driving your car out of the dealership. Luckily, most insurance companies can add a new vehicle to your policy the same day you purchase it. You can also opt to notify your current insurance company ahead of time that you plan on buying a car. Your company will then ask for your vehicle details and the date you plan on finalizing your purchase. By doing this, your company can schedule your vehicle to be added with the policy effective on the purchase date. This process is known as a future-dated endorsement.