Nowadays, many households own more than one car. The reason is simple – a car is no longer a luxury commodity used only for trips and long rides. When each family member is working or studying, they all require a separate, private vehicle. We have said goodbye to public transportation for a variety of health reasons. And, when a private car offers comfort and time-saving benefits, we can’t look back.
With multiple cars in a family, you need to buy car insurance separately, track the renewals, and follow different claim processes. To make the process easier, we present to you multi-car insurance. It will cover all the cars in a household under a single policy, much like a family floater.
With a multi-car insurance policy, you can receive discounts on the premium, cover all your cars at one go, and enjoy several other benefits. Read on to know more about it in detail.
Who can apply for multi-car insurance?
To be eligible for this policy, you must belong to the same household or family that owns more than one car. Those who can apply for this cover include:
- Families having multiple four-wheelers or drivers
- Couples having separate cars
- Single owner of several cars
- Residents sharing a household having multiple cars
Generally, all cars must be under the same address under a multi-car policy, but some insurers may provide exceptions. The insurer also covers the four-wheelers of the people living at different addresses under a single policy. For example, parents and children staying separately.
Factors affecting a multi-car policy
Several factors may affect the policy premium, such as:
- Number of cars under the policy
The greater the number of cars under a policy, the higher would be the risk. So, a policy having two cars under its cover might be cheaper than a multi-car policy covering five vehicles.
- Category or car model
You may have different car models, such as an SUV, an Audi, or a Mercedes, that you want to cover under the policy. A multi-car policy considers the car with the highest Insured Declared Value (IDV) as the Primary Vehicle. The highest IDV will be the sum insured of the motor floater policy. The rest of the vehicles are known as Secondary Vehicles under this plan.
- Age and experience of the owner-driver
The premium quote will be higher for an adult over 40 years than an 18-year old under the same policy. But, the overall premium will go down with an older driver.
- Duration of policy
Multi-car insurance will come into effect only after considering the latest renewal date of your previous car policies. The insurer may provide a temporary or a short-term cover for the cars with earlier policy expiry dates.
How to make your multi-car insurance cheaper than standalone third-party car insurance?
- Named driver
Adding older and experienced drivers to your policy as named drivers will reduce the premium. An adult above 40 years may drive more safely than a young and less experienced driver. However, the named driver must be behind the wheel more often than others to avoid insurance fraud. If all the household members are the named drivers, each gets the right to drive all the cars.
- Terms of the policy
The policy may have some accumulated no claim bonus (NCB). In the future, you may need to file a claim on any car. The policy terms must ensure that the NCB of the other cars does not get affected. So, review the NCB clause carefully before purchasing a policy.
Generally, an insurer provides higher discounts on multi-car policies than standalone policies, as you are insuring all the cars at one go.
- Fixing the IDV
If you have two medium-range or budget cars and a luxury or premium car, you must exclude the latter from multi-car insurance. The expensive car will have a higher IDV, or market value, increasing the policy premium. A multi-car insurance plan considers the highest IDV to fix its cost.
- Increase car security
You must set up an authorised car alarm, reducing the risk of theft and leading to a lower premium. You can also fit an engine immobiliser as an added security feature.
- Compare between plans
Since insurers offer numerous plans, you must compare their coverage amount, total premium, discounts, NCB rules, claim process, etc. You must aim at a policy with a low premium but high coverage.
So, combining the benefits of several different policies into a multi-car insurance cover is cheaper and advantageous. But, compare between various plans to get a lower premium before purchasing.