Car Insurance for a Second Vehicle

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Important facts to know...

  • In most states, drivers are required to insure all of their vehicles, no matter how many they have
  • Car insurance for a second vehicle will increase your premium
  • You can decrease your premium by only selecting the coverage types you need to have and by asking for available discounts such as a multi-vehicle discount

Many Americans have a second vehicle, whether it is for other members of their household to use, for work purposes, or for recreation.

Although it is important to insure your second vehicle, there is no reason it should break the bank. You can use an online price comparison tool to find the best rates for all of your vehicles, no matter how many you have.

Try our FREE online quote tool and start comparing auto insurance rates today! Enter your ZIP code above!

Do I need to insure my second vehicle?

In the eyes of the law, insuring your second car is just as important as insuring the first.

Most states require drivers to have liability coverage, at a minimum, on every vehicle that they own. In general, a policy on one car will not automatically cover another vehicle, unless it is listed on the policy.

Options for Auto Insurance Coverage

While most states mandate liability coverage on every vehicle, drivers have many options when it comes to their auto insurance.

It is important to understand that car insurance policies are like several mini-policies rolled into one. Each mini-policy covers a different set of circumstances.

Here are the various types of coverages available in most states:

Liability

Liability is a mandatory coverage that is in place for damages you may cause.

Bodily injury liability covers medical and funeral expenses, while property damage liability pays for damages you cause to other cars, buildings, or landscaping.

Uninsured/Underinsured Motorist

If you are in an accident with another driver who does not have liability coverage or you are the victim of a hit-and-run accident, you can rely on your uninsured motorist coverage to help pay for your damages.

If you are in an accident with someone who does not have enough auto insurance coverage to pay for all of your damages, your uninsured motorist coverage will kick in where there’s left off.

In some states, uninsured motorist coverage is required legally.

Medical Payments or Personal Injury Protection

Also known commonly as PIP or med pay, this coverage is legally mandated in some states. Med pay helps pay for your medical bills from an accident, no matter who was at fault.

In some cases, med pay will also help with any lost wages and expenses for hiring help around your home in direct relation to the accident.

For instance, if you were hurt bad enough that you could not cook, clean, or care for your children, med pay might reimburse you for expenses to hire a housekeeper or childcare worker.

GAP

If your car is damaged in an accident, your auto insurance company can choose to pay you the fair market value for your vehicle instead of paying a higher price to fix it.

Since cars depreciate at a high rate, there can often be a gap in between what is still owed on a loan or a lease and what is considered to be the fair market value for your vehicle. GAP insurance will pay for this difference.

If you do not have this type of coverage, you will be required to pay off your loan or lease on your own. However, most leased vehicles already have GAP coverage rolled into their contract price.

Collision

Drivers need to keep in mind that liability only covers the damages they cause to other people and their property. It will not cover your damages.

For your damages to be covered, you need collision coverage.

With this coverage type, you select a deductible and your policy limits.

Comprehensive

Comprehensive coverage is for situations where your car is damaged but not as a result of an accident.

For instance, you can file a claim on the comprehensive portion of your auto insurance policy if:

  • You hit a deer or large animal
  • Your car is vandalized or stolen
  • Your car is damaged in a fire, flood, hail, or natural disaster

Comprehensive is similar to collision coverage in that it is not required and you choose your policy limits and deductible. If your vehicle is leased or financed, you may be contractually required to have both collision and comprehensive coverage on it.

Roadside Assistance

While not necessary, roadside assistance coverage can be good to have when in a pinch. If you are on the road and encounter mechanical problems, run out of gas, have a dead battery, or a flat tire, help is merely a phone call away.

Do I have to have the same coverage on both vehicles on my policy?

When you insure a second vehicle, you can select different coverages than what is on your first vehicle. The two policies do not need to be identical, and in many cases, they should not be.

For instance, if your first vehicle is financed, to protect yourself, you should have full coverage, including collision, comprehensive, and GAP. However, if your second car is paid off, you may elect to just have liability coverage on it.

Perhaps your teenage children drive it, and you worry about them experiencing breakdowns while on the road. In that case, you may want to also add roadside assistance coverage.

You can also select different deductible amounts for your comprehensive and collision coverage on each vehicle separately. Being able to pick and choose which coverages you have on the second vehicle will save you money.

Should I insure both vehicles with the same company?

Insuring all of your vehicles with the same company and on the same policy is convenient and beneficial.

A multi-policy with the same company not only cuts down on paperwork and hassle for you but it usually also gets you a multi-vehicle discount.

These discounts are handy, especially when you need insurance coverage for more than one vehicle.

Additionally, there are other discounts you can ask your auto insurance carrier about, such as:

  • Safe driver discounts
  • Loyalty discounts
  • Military or veteran discounts
  • Low-mileage discounts, etc.

Saving money on auto insurance is important, especially if you have a second vehicle to get insurance coverage for.

You can shop around for the best possible auto insurance premium by using an online price comparison tool. These tools provide you with a customized quote based on your coverage selections and vehicle types.

Try our FREE online quote tool and start comparison shopping today for better auto insurance rates! Enter your ZIP code below!

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