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

Separate policies on one car usually cost more than a joint policy.
i Comstock/Comstock/Getty Images

Although two people can carry separate insurance policies on the same car, it's not always the best move. Depending on your driving records and credit histories, separate liability insurance coverage could offer better protection. At any rate, if something bad happens, the two of you can't collect in full for the same accident.

Insuring a Vehicle

While minimum insurance requirements vary, most state laws demand you have insurance on a car you own before you put it on the road. If you own a car with someone who lives at the same address, the two of you can be insured on the same auto policy or buy your own policies. Even if you own the car with someone you aren't married to, you can name that person as another insured driver on your policy.

Different Risk Factors

Individual risk factors affect the price you pay for insurance. Different drivers often qualify for different discounts. For example, a driver who is accident-free may get a discount while a driver with multiple traffic violations may pay a higher premium. Because drivers pose different risks, they have different coverage needs. As a result, their insurance premiums can vary.

When Separate Policies Count

While combining auto insurance coverage generally costs less, having a driver with a history of accidents or traffic violations on the same policy will increase the rate. If one of you has bad credit, that’s going to raise the cost of your car insurance as well. On the other hand, having a second policy on the same car may pay accident bills left over after the primary policy pays up to its maximum limits. In some states, companies divide a comprehensive or collision loss equally between the two policies.

Extra Cost

Adding more risk to a single policy increases the premium rate. Besides paying more, you can lose discounts that help keep your insurance costs down. For drivers who aren’t married to each other, a shared policy can put the separate assets each person owns at risk of a lawsuit if either causes an accident. The National Association of Insurance Commissioners recommends you learn the minimum amount of liability coverage your state requires. Then you can choose the type of coverage that works best for your individual situation.

the nest