What’s the Benefit to Multi-Car Insurance?
Many people recognize that multi-buy discounts are a great way to save money on many of the things that they use every day. However, these individuals might still be suspicious of multi-car insurance. Consumers understand that economies of scale work for physical or durable goods, but the application to a product like motor insurance can be a bit confusing. In order to help you understand if you should be perusing a multi-car policy to save money, we’ve put together this guide, which will explain multi-car policies, and outline the conditions where a multi-car policy can save your hard-earned quid.
What is Multi-Car Insurance?
Multi-car insurance is a product that lets you get cover for all of the cars that are registered at your address with the same company. This can be two cars, or it can be many cars. This is an especially important consideration given that almost one in three UK homes have more than one car registered to them.
What are the Advantages to Multi-Car Insurance?
There are a number of benefits that drivers can get from multi-car insurance policies. The first reason is that multi-car policies simplify the car insurance process. With a multi-car policy there is only one set of forms to fill out, and only one renewal date for drivers to keep track of. These circumstances hold true no matter who the main driver is on each vehicle, so long as they are registered at the same address.
Another advantage for multi-car insurance policies is that they can lead to impressive savings for many drivers. Covering many cars with the same policy ensures that the company has a revenue stream from you as a customer, and the number of cars you insure are likely to produce more profit, outweighing the risk of an insurance payout. It is important to keep in mind that the pricing for insurance comes down to statistics, and those individuals who have multiple cars registered have shown that any one of them is less likely to be in an accident than if all of the cars were insured under different insurance policies.
The savings a driver can get depend on the circumstances. For example, for a single driver who owns multiple cars and wants to insure them all on the same policy, the discounts are likely to be fairly substantial. This is because the individual can only drive one car at a time, so while they are driving one car, the rest of the cars insured by the company are safe at home and not at risk of being in an accident. This reduces the overall risk for the insurance company, and they tend to pass the savings to the consumer.
However, a multi-car policy that covers multiple drivers won’t result in the same level of savings, as the cars can all be in use at the same time, so the amount of risk for the company is not as low as it is with an individual driver who owns multiple cars.
What are the Disadvantages to Multi-Car Insurance?
While multi-car insurance policy holders will save money in the long run, something that should be considered is that the bill for new insurance will trigger at the same time for all of the cars. This can leave motorists with a large up-front expense for car cover, and may require shrewd planning to ensure that you have the capital on hand to fund your motor insurance.
Another potential issue is that high-risk drivers on a multi-car policy can raise the price for everyone else. The insurance company calculates and averages the risk across all cars and drivers, so your teen that has taken out a number of the trees in your community may make the rates on all of the household cars that much higher.
Should I Get Multi-Car Insurance?
As with any financial product, there are no hard and fast rules regarding who should get multi-car insurance. Drivers are encouraged to shop around and compare different policies to see if they can find the optimal cover for the price that they are able to pay.
There are many other ways to save some quid on car insurance, so be sure to check out our other guides before deciding that a multi-car policy is the best choice for you.