ll of the UK’s drivers are required to insure their cars. As well as being a legal obligation, it’s an essential means of financial protection should you end up in an accident, or if your car gets stolen..
For families with several cars on the driveway and multiple drivers living under one roof, it’s possible both to save money and reduce the hassle of dealing with several providers, by buying multi-car insurance to cover the entire household. Here’s what you need to know.
How does multi-car insurance work?
With a multi-car insurance policy, the main requirement is that all drivers live at the same address, or that all vehicles are parked at the same registered address.
Typically, you get the same features with a multi-car policy as you would with a traditional motor insurance policy covering a single vehicle. Depending on your choice of insurer, a feature of several multi-car policies is that they offer discounts to customers on their premiums. Typically, 10% for each vehicle that’s added.
In addition to covering all the vehicles at one address, some policies can also cover close family members residing elsewhere. For example, a university student who is living away from home during term time.
The important thing is to check a policy’s details before signing up to it. Some multi-car policies specify that drivers must all live at the same address to qualify. So check those terms and conditions carefully.
Why choose multi-car cover?
As well as suiting a family of drivers, it’s also a convenient way for friends with several cars in shared accommodation to arrange their motor insurance cover. It’s also suitable for car enthusiasts and collectors who plan to keep several vehicles under one roof.
What cover is available?
With multi-car insurance, you will need to choose the level of cover for each driver and car as you would with a standard policy. As usual, this boils down to three versions: third party, third party, fire and theft, and fully comprehensive cover. Third party insurance is the minimum basic cover you need to drive legally on UK roads, while comprehensive is the most extensive option.
Can I add extras to my policy?
Yes. It’s possible to add on extra elements of cover to a multi-car policy that take account of a whole range of scenarios. You will usually have to pay an additional fee to bolt on each additional lay of cover, including:
- Legal expenses
- Courtesy car
- Personal accident
- Replacement keys
- Driving on the Continent
How do renewal dates work?
If you’ve already got separate insurance policies for cars at your address which are due to end on different dates, this isn’t an issue. Your multi-car insurer co-ordinates the various renewal dates and translates them on to one over-arching policy.
Each car is added to the multi-car policy once the insurance on its existing policy comes to an end. Renewal dates going forward will then typically be based from the time that the first vehicle was added to the multi-car policy.
What is a ‘linked’ policy?
Where several cars are covered on one policy, it’s usually the case that each motorist has the same level of cover.
A ‘linked’ policy, by contrast, provides different levels of cover and add-ons for each car.
This might be preferable, if, say, a parent wanted comprehensive cover for his/her vehicle, but only third party, fire and theft cover for a son or daughter’s car. With this type of cover, each policy will have its own renewal date.
Weighing up the benefits
If you want to insure several cars belonging to the same household, a multi-car policy can often work out cheaper due to the discounts that are available.
But don’t assume this is the case. To calculate premiums, insurers take a range of factors into account, including the age and experience of each driver, the make and model of the cars being driven, plus mileage and modifications.
A driver’s age, as well as the car’s insurance group ranking, are two of the biggest factors to impact on the cost of premiums.
A higher-risk motorist, such as an 18-year-old who drives a modified car that sits in a high insurance group, could therefore push up the overall cost of a multi-car quote for the rest of the drivers in the household. In this instance, it might work out cheaper for each driver to take out individual insurance.
Tips for buying multi-car cover
Do your research before taking out multi-car insurance. Use online comparison tools to weigh up the cost of taking out several individual policies against a single, over-arching line of cover. Don’t forget to factor in any discounts offered by the multi-car option and ask yourself how much you’d value a single renewal conversation each year compared with having several with potentially different providers.
When researching quotes, make sure you’re comparing like for like. There’s no point weighing up a quote for third party only insurance with one for comprehensive cover that includes a load of add-ons.
Benefits of multi-car insurance
- Can be cheaper than buying separate policies thanks to discounts
- Easier to deal with just one insurer rather than several providers
- Payments should be more straightforward with one provider
- More convenient to make a claim only having to deal with one set of paperwork
- Easier renewal process as all the dates are lined up
- Covers family members living away from home, such as university students
- Despite being grouped together, allows individual drivers to build up their own no-claims bonuses
Disadvantages of multi-car insurance
- Insurer-dependent, but the number of cars covered could be limited to five or six
- Doesn’t always work out cheaper. One driver’s poor record could increase the costs for everyone else on the policy
- With a linked policy, one driver’s claim could push up premiums at renewal time for everyone else
- Aligning dates for all motorists in a household could produce a bigger one-off bill at renewal time. Separate policies can be staggered throughout the year.