The Benefits of Family Auto Insurance Coverage

No matter what your family size, there are many benefits to having the whole family covered under one auto insurance policy. Most of the benefits are financial, but that’s precisely what most people want and need in coverage these days.

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While it is perfectly legal and legitimate to insure each driver in the family on his or her own policy, it usually makes much more sense to have just one policy for the family. Payments, the ages of drivers and various discounts all come into play.

Multi-Car Discount

One benefit to having all the cars and drivers in the family on one policy is that most insurance companies give a pretty substantial discount if you insure more than one car on the policy. This is usually called a multi-car discount.

If a husband and a wife each have their own policy, then they will both be paying the full amount. If they combine the cars onto one policy, they will both get the discount. This discount can vary by state, but can easily be in the $100 to $200 range for just two vehicles or more.

If you have more vehicles, the discount gets bigger. While not all car insurance companies cover other items, if you have a boat, recreational vehicle, or motorcycle, ask your company if they will cover these as well.

Getting all your motorized vehicles onto one policy is the best way to save on every single one of them.

Mixing It Up

Having all your cars on the same policy doesn’t mean that the coverage for each of them has to be the same. You can set how much liability you want on each car, as long as it meets the legal requirement in your state. You can set the amount of PIP or medical payments you want on the policy too.

You can even carry comp and collision on one car but not the other. If one spouse has an older commuter car, he can have liability only on it, while the other spouse has comp and collision on hers. Also, you can set different deductible levels for each car. So combining still gives you the flexibility of a single policy while letting you save money.

The only time it might not be beneficial to combine the drivers onto one policy is if one has a horrific driving record, or needs a special insurance like an SR-22 because of a DUI. Then it might actually be cheaper to get separate policies.

Helps Teen/Young Adult Drivers

Another benefit to having a family auto insurance policy is that it is much cheaper for teen and college aged drivers to be on their parents’ policies than to get their own.

As the California Department of Motor Vehicles reports, 16 to 19 year old drivers have the highest number of traffic accidents each year. They also get a disproportionate number of traffic citations. This results in every young driver paying higher insurance costs, as the entire age group is considered extremely high risk.

If a teen or young adult gets his own policy, that cost is even higher. If he is simply added onto his parents’ policy, he benefits from having older, more mature drivers on the policy as well as the discounts his parents bring to the policy. While it is cheaper for the teen to be a secondary driver on his parents’ cars, this is still true even if he has his own set of wheels.

One way the student can help himself is to keep his grades in the “A” and “B” range. Most companies will add a good student discount to the policy if this is the case.

Another great way for parents and young drivers to help lower their overall cost is to enroll the student in a teen safe driving course. This is not the same course he or she took to get a license, but an extra course that teaches more driving safety. Like a defensive driving course can give adults a discount, these courses for teens can add yet another discount to the family’s insurance policy.

For more information about teens and safe driving, visit the National Highway Safety Administration’s site.

Homeowners Discount

Not only does combining all the cars onto one policy make good financial sense,  but it also allows the family to take advantage of another perk many auto insurance companies offer: getting even more discounts by getting your homeowner’s policy from the same company.

Obviously, insurance companies are businesses who would like as much of yours as they can get. So they give you extra incentive to buy policies for all of your insurance needs from their organization. The good news is that this discount applies not just to the auto policy but also to the homeowners, or renters, insurance. This discount can be very substantial, depending on where you live and your circumstances.

While this varies from company to company, some even offer life insurance. If you are in the market for this type of coverage as well, try to get them all from the same company. Not only does that greatly simplify matters for you – there’s only one number or agent to call if anything ever happens – but you’ll be maximizing you savings.

Fewer Bills to Pay

In a day when families are busy with work, school, sports and other extracurricular activities, keeping things simpler makes it easier on everyone.

By having all your insurance on one appropriate policy, not only will you be simplifying who to contact in case of an accident or other loss, but you’ll reduce the number of bills you’ll have to pay.

This in itself can save you money. With multiple bills due at different time, it might be easy to get behind, or miss a payment, or send it in late. These errors can cost you big late fees, and risk cancellation of your policies. With one bill, you’ll greatly lower your chances of this.

To reduce it even more, ask your company if they can set up automatic payments. Not only does this relieve you of having to remember to pay that bill each month, but many companies offer an additional discount if you do this.
But don’t let this easy payment plan keep you from keeping on top of your insurance needs. The National Association of Insurance Commissioners recommends that everyone review their insurance needs and policies at least once a year and when life altering events occur.

Make Sure You’re Fully Covered

If you have your insurance policies spread all over the place, it’s hard for anyone to keep track of your coverage and any gaps in it. When you have your car insurance, and possibly homeowners, renters, or life insurance with one source, it’s much easier to call up your agent or a customer representative to go over your policies with you. This can help you decide if any changes need to be made.

No matter what your state requires you to carry, you need to have enough insurance to protect yourself financially.

That’s why the Insurance Information Institute suggests raising your liability coverage to at least 100/300/50, as this level is usually sufficient to cover accidents with a high amount of damage.  It also protects you from being sued if you have too little insurance to cover someone’s medical bills.

More Ways to Save Money

While covering all of the family’s cars on one policy is a great way to save money, there are many ways to chip away at the cost of auto insurance.

If you have comprehensive and collision on your cars, consider raising the deductible. The more you agree to pay out of pocket for repairs after an accident, the less the insurance company will charge you for that part of the policy. Experts usually recommend having a $1,000 deductible, and then putting $1,000 into an interest-bearing savings account only to be used for this deductible.

Of course, not all cars need comp and collision. If you can afford to repair or replace the car out-of-pocket, then consider dropping this part of the coverage, which is often the most expensive part. This is usually done on older cars worth $1,000 to $3,000, depending on your comfort level.

Also make sure your insurance company is aware of all the safety features on your car. Often you’ll get extra discounts for having things like air bags, anti-lock brakes, and some sort of anti-theft device.

Compare and Save

Another top tip is to take the time to shop around. No two insurance companies compute premiums exactly the same way, even for the same person. One might put more weight on past traffic accidents and tickets, while another may look more at age and financial responsibility. The difference can be in the hundreds of dollars.

Thus the only way to know for sure that you are getting the best deal is to comparison shop, just as you would for any big purchase. Get quotes from several different sources before you decide on one company. Just make sure you give them all the same information so you can make a fair comparison.

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