Can a Car Have Two Separate Insurance Policies by Two Different People?

Most states require drivers to carry some type of car insurance on their vehicles. In those cases, the minimum prerequisite is normally basic liability protective covering that covers personal injury and property damage. Lenders can besides require indemnity to protect their fiscal interest in a vehicle while money is owed on it. sometimes however, questions can arise over who can insure a vehicle and whether more than one policy is needed.


While it may be legal for two different people to have two separate indemnity policies on a car, many insurance companies do not allow the practice. It can besides cause problems when you need to make a call.

Requirement of Insurable Interest

In order to insure something, whether it ’ s a life, a home or a car, you have to have what the insurance industry calls “ insurable interest. ” Basically, it means you stand to lose something if the item in question is damaged or destroyed. In the case of a car, the owner normally has an insurable interest. Your neighbor wouldn ’ thyroxine be able to insure your car because it wouldn ’ t affect him financially if anything happened to it. There are some scenarios in which more than one party can have insurable interest in a cable car though, such as co-signors and lien holders. If the car is wrecked, for exemplar, a co-signor could be held accountable for any total however owed on the vehicle, and the lender could be forced to take a loss if that balance can ’ triiodothyronine be recovered.

Problems With Too Many Parties

even though several parties can have insurable concern, it ’ s not necessary for each concerned party to carry his own policy on the cable car. In fact, doing so could create significant problems when it comes clock to collect. indemnity companies are like any other business in that they ’ rhenium in it to make money. accordingly, they won ’ deoxythymidine monophosphate pay if they don ’ t have to, and introducing another indemnity company into the mix could give them good that opportunity. While they ’ rhenium busy fighting it out over who is supposed to pay out the claim, you could be left in the prowl. pretty much any policy policy can be structured to satisfy the needs of every interest party without having to double see.

Is It Legal or Not?

Most indemnity companies won ’ t leave multiple policies on the same car because of something called “ unfair enrichment. ” That ’ s a fancy policy term for the idea that you shouldn ’ triiodothyronine be able to profit from a personnel casualty. If your car is worth $ 10,000 and it ’ s insured with two companies, you could conceivably get a payout of $ 20,000 if the car were wrecked and you filed claims with both companies. Although laws may not prohibit double insurance, realizing that kind of reach could be construed as fraud and may subject you to significant penalties.

Better Safe Than Sorry

double indemnity can happen for a number of reasons that can all seem legitimate, but ultimately it ’ south probably not worth the extra money you ’ five hundred be paying out. It ’ s particularly not worth it in light of the fact that you probably can ’ thyroxine roll up on both policies without risking legal fuss. Insurance laws vary between states, however, and different companies can have different policies. For case, California allows for self-insurance while Illinois does not unless you own more than 26 cars. Schedule an appointee with your agent to look over your policies. She can make sure you have the coverage you need and that you ’ re not paying more than you have to.

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