Gianetta Palmer is a writer for, copywriter, and essayist. Her work has appeared in, Healthline, and The Dyrt Magazine. She is the author of Scrunchie-Fried and writes a lot about car insurance in her spare time.

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific car insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. She also specializes in automa...

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Reviewed by Melanie Musson
Published Insurance Expert

UPDATED: Mar 13, 2020

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Auto insurance can be expensive, and for households with multiple vehicles, the cost increases. Each car needs its own coverage, and failure to insure every vehicle will lead to fines and potentially trouble with the police and the DMV. Insurance follows the vehicle, not the driver, so an individual must make sure that any individual vehicle is insured before driving it on the open road, even if they have their own auto policy.

Since car insurance is an unavoidable expense, it’s important to focus on getting the best deal on your premiums without sacrificing the coverage that you need. This will protect you from lawsuits and citations and provide appropriate protection for your assets.

Why You Need Liability Insurance on All Cars

Liability insurance protects you from lawsuits if you ever cause damages or injuries to someone or their property. Because you are responsible for your actions while driving, you are held personally liable for accidents that you cause. In order to forestall these costs, people are required to carry auto insurance; this is because most drivers do not have enough money available on-hand to cover the costs of an accident.

Auto insurance follows the vehicle because that’s the easiest way to ensure that an accident will be covered. Whenever a collision happens, the vehicle itself causes the damage, and the vehicle’s owner is responsible for the damage no matter who is driving when the accident occurs. This prevents people from denying liability when their children take a car for a joyride or when a parked vehicle rolls into another car.

Even though the vehicle’s owner is not in the vehicle for these situations, they are still ultimately responsible for the vehicle. This is similar to a dog owner’s responsibility if the dog bites someone: Even if the owner is not present for the bite, they are still liable. Because your car is your property, you are financially responsible for it, and the easiest way to make sure you’re responsible is to insure every car you own.

Another reason that individual vehicles require their own coverage is that insurance rates are largely dependent on the type of car being insured. A vehicle with safety features and anti-theft devices will have lower rates than a car without these features, and cars that are more expensive to repair will cost more to insure than affordable vehicles. Similarly, large cars can do more damage and thus pose a greater liability risk than smaller vehicles. Insuring each vehicle separately allows the insurance company to customize the policy premiums to the individual vehicle.

Do You Need a Separate Policy for Each Car?

Although you will need to purchase separate coverages for each vehicle, you can insure several vehicles on a single auto policy. If you have too many cars to carry on a single auto policy, you can purchase multiple policies and link them together. Bear in mind that while you can vary coverages from one vehicle to the next on a single policy, all driver information for a policy is consistent for each vehicle.

This means that if you have a driver excluded from using one vehicle on your policy, that individual is excluded from using any one of the listed autos. If you have two separate policies, however, you can exclude a driver from the vehicles on one policy while including them on another; this is a good way to insure your teenager without your other insurance rates increasing.

Saving Money on Multiple Car Insurance Policies

Fortunately, insurance companies help to reduce the cost of insurance for households with multiple vehicles. Most companies offer discounts for multi-car households, and they provide discounts for multiple policies as well. The reasoning behind this discount is that it’s unlikely that a person would need to file a claim on all of their policies in their lifetime. The more policies a person has, the better the odds that they will never need to use all of them, so the insurance company can make a greater profit. This is true for other types of insurance you may carry as well, such as homeowner’s, renter’s or boat-owner’s insurance.

All of this does not mean that insuring multiple vehicles is always affordable. Indeed, it’s important for large families, car collectors and other people with numerous autos to comparison shop for insurance and take the time to purchase the right policies. Coverages should be customized to fit each auto so that no single car is over or under-insured; this will help keep the cost reasonable without leaving the driver at risk if an accident does ever occur.