Covering all family members under the same policy may not seem like such a good idea if you’re the only driver in the household. Afterall, if you have insurance for yourself, all of your passengers will be automatically insured in the event of an accident, and there isn’t a need to create even more administrative headache for yourself.
However, what if your child comes of age, passes his driving test, and finally gets to drive your vehicle? What if your spouse gets that license he or she always wanted, and frequently takes your precious car out for long drives? Wouldn’t it make more sense now to be covering all family members under the same policy, especially when there are multiple drivers in your household?
Before We Begin: Multi-Car Insurance vs Single-Car Household Insurance
Before we move on, however, let’s distinguish between 2 possible types of family auto insurances: multi-car insurance and single-car household insurance.
A multi-car insurance policy, as the name suggests, insures multiple cars in a single household. This is possible even if you are the only driver in the household. The advantages are less paperwork and possibly less premiums – most insurance companies will give discounts for this, because these insurance policy sign-ups gives more businesses to them.
A single-car household insurance, in contrast, only insures one car. It is assumed that there are multiple drivers that are driving the vehicle. Although the average premium of all drivers insured under this policy will be lower than if the individuals were to apply for individual insurances, you might find your own insurance premium increasing because of this, especially if you are adding drivers below the age of 25, or drivers with DUI indicted against them.
Advantage 1: You Save Money!
This is probably the most important reason for covering all family members under the same policy: save money! By introducing your family members into your existing auto insurance plan, you do your insurer a favor by giving them more business.
Well, then, why shouldn’t they encourage individual insurance policies for every driver in your household, then? The reason is simple: by encouraging family auto-insurances, they save on administrative costs as well; there is essentially only one point of contact in the event of claims and rebates.
Advantage 2: Less Administrative Headache
The insurers avoid administrative headaches through family auto insurances – and so do you! By covering all family members under the same policy, you save yourself from the trouble of meeting with the same agent multiple times, or with different agents, especially when you’re guiding your teenage son or daughter through application for auto insurances.
This is especially true for multi-car households! If you have more than 1 car and more than 1 driver, covering all family members under the same policy saves you a lot of administrative headache! Imagine the trouble of applying for auto insurance coverage for just one vehicle. Now, multiple that by the number of cars you have. Isn’t it obvious that a coverage that covers all family members make more sense?
So, When Should You NOT Get A Family Auto Insurance?
When some of the other drivers are excluded from the family auto insurance – Sometimes, the policy simply excludes some drivers in your household from being included into the auto insurance. If there are drivers that are too young, have a large number of demerit points attributed to them, or have been charged with DUI, covering all family members under the same policy may not be possible.
When one of the drivers in your family is a “bad” driver – This is somewhat similar to the point above; the inclusion of this driver may cause a huge spike in the premiums that must be paid. In this case, it might be more economical to get a separate auto insurance for that particular driver, instead of including him into the family auto insurance.
Covering all family members under the same policy is definitely a great time-saving and cost-saving move – unless one or more of your family’s drivers is deemed as a “bad” driver by your insurer. Call up your insurer to discuss this, and make sure you calculate money you’ll save from alternatives (such as getting a separate policy for a particular driver) before you make your decision.