Can You Have Two Car Insurance Policies for the Same Car?

Last Updated on August 16, 2023

Is it possible to double insure a vehicle? Find out today as we explain everything you need to know about getting two car insurance policies for the same car.

It Is Not Illegal to Take Out Two Insurance Policies on One Vehicle

First, let’s make one thing clear. It’s not illegal to take out two insurance policies on a single vehicle.

However, most insurance companies have policies discouraging the practice of insuring a vehicle twice.

Furthermore, making two claims with two different insurance companies for the same accident could be considered insurance fraud. Insurance companies call it “unjust enrichment” because you could get paid twice for a single covered incident.

That being said, there’s nothing preventing you from buying two insurance policies for the same vehicle. However, the insurance policies must come from two different companies. One insurance company will not insure the same vehicle twice. You will need to buy a second insurance policy from a different carrier and pay both premiums.

Why Would Someone Insure a Vehicle Twice?

Insuring a vehicle twice is not common. Most ordinary people in ordinary circumstances will not double insure a vehicle.

However, there are certain situations where someone might be tempted to buy two insurance policies for the same vehicle, including:

• If you and a roommate both drive the same car but want different levels of coverage, then you might get two insurance policies; your roommate might pay for one policy, for example, while you pay for full coverage car insurance
• To give yourself added protection
• To ensure your insurance never lapses
• To commit insurance fraud (make two claims for the same accident)
• Some people might insure a vehicle twice by accident; they might assume a vehicle is uninsured, for example, when a spouse or roommate has already purchased insurance for it
• Let’s say two people drive the same vehicle; one driver is considered high-risk and the other is not, so the two drivers get separate insurance policies

Ultimately, it’s unusual to get two insurance policies on a single vehicle, and there are generally better options available. Compare quotes online today, for example, to ensure you get the best possible rates. You can list multiple drivers on a single insurance policy and save money instead of buying two separate policies.

Check Your Insurance Policy to Avoid Violations

Insuring a vehicle twice isn’t illegal. An insurance company cannot prevent you from insuring a vehicle twice.

However, you may be violating the policies of one or both insurance carriers by insuring the same vehicle twice. Check your documentation to ensure your coverage remains active.

Some drivers double insure a vehicle assuming neither insurance company will find out. This may not be the case. When you register your vehicle with the DMV, or when the DMV is notified of your insurance policy, the DMV may alert both insurance companies, at which point problems may arise.

Car Insurance, Double-Dipping, and Unjust Enrichment

States and insurance companies frown upon policyholders who take two insurance policies out for a single vehicle because of something called “double-dipping”.

In insurance terms, double-dipping is an act where you file a claim with both insurance companies to receive a payout from both insurance companies. You have only suffered one loss, but you will be compensated twice for that loss. You’re double-dipping to give yourself a financial windfall. It’s a type of unjust enrichment.

With double-dipping, you can use the money from the first insurance company to pay for your vehicle repairs or replacement, then pocket the money from the second insurance company.

Filing two claims for a single incident is considered insurance fraud. It is illegal. Policyholders can be charged with a felony for double-dipping.

Requirement of Insurable Interest

In order to insure something, you need to have an “insurable interest” in that thing – whether it’s a life, a home, or a car.

Basically, insurable interest means you stand to lose something if the item in question is lost, damaged, or destroyed.

Your neighbor cannot insure your car, for example, because the loss or damage of the car would not affect your neighbor financially.

However, it’s possible for multiple parties to have an insurable interest in something like a car. Co-signors and lien holders, for example, may all have an insurable interest in a vehicle.

Each Party Is Not Required to Carry a Separate Policy

Several parties can have an insurable interest in a vehicle. It’s not required for each interested party to carry his or her own policy on the vehicle.

As mentioned above, having multiple policies on the same vehicle could create significant problems when it comes time to make a claim.

Remember: insurance companies are for-profit businesses. They want to make money. If they see an excuse not to pay out a claim, then they’ll take that excuse and deny your claim.

Double Insurance is Rarely Worth It

Doubling up on car insurance may sound like a good idea – but it’s generally not the best financial option available.

Yes, you can buy multiple car insurance policies for the same vehicle, but it’s often easier (and more affordable) to buy one policy with multiple drivers or parties listed.

Furthermore, insurance laws can vary between states and companies. Your insurance company may specifically prohibit having two insurance policies for a single vehicle, even if those two policies come from separate companies.

Final Word on Having Two Car Insurance Policies for the Same Car

Yes, you can have two insurance policies on one vehicle. However, it’s generally not in your best interest to insure a vehicle twice. It’s not illegal, although there are only a handful of situations where insuring a vehicle twice makes sense.

Furthermore, insuring a vehicle twice could violate the terms of one or both insurance policies. Check your policy documentation.

Finally, double-dipping is illegal because it’s insurance fraud. You are not permitted to claim the same incident twice under both insurance policies and receive two payments for one incident.