Understanding multi-car insurance in Australia

A multi-car insurance (also known as multi-vehicle car insurance) policy is where two or more cars are insured under a single policy. Each car is typically treated separately and will have its own cover details. For example, the following details may vary for each car:

• Excess amount
• Listed drivers
• Chosen level of cover.

The cost of insuring each vehicle is then combined to provide an overall premium for the policy.

Multi-car insurance policies can be difficult to find, meaning you can’t compare car insurance quotes on our website like you can with a standard car insurance policy. Before deciding on your multi-car insurance cover, it’s important to read the relevant Product Disclosure Statement (PDS) to understand the limits, sub-limits and exclusions. Reading the Target Market Determination (TMD) could also help you determine if a policy is right for you.

As finding a multi-car insurance policy can be difficult and not necessarily cheaper overall, it may not be the most worthwhile option, depending on your circumstances. Instead, it may be worth searching different car insurance options to be sure you’re choosing the one that best suits your circumstances.

If you live in an Australian household with a number of vehicles, you may be eligible for a multi-car insurance policy. Some examples of people who may be able to get a multi-car policy include:

• A single person who owns two or more vehicles.
• A couple who has multiple vehicles between them.
• A parent or parents with children who are of driving age and own their own car.
• Multiple people living at the same address (e.g. family members or close friends) who have their own vehicles.

Even if the vehicles don’t all belong to the same person, there will only be a single bill for the policy and one primary policyholder.

While you need at least two cars to be eligible for a multi-car policy, the total number of cars that can be covered can vary between car insurance providers. Always shop around to find the most suitable policy for your needs.

• Less paperwork. If you’re sharing a single car insurance policy, you have the convenience of not having to manage different renewal dates and policy documents from different insurers that come with having multiple policies.
• Potential policy discounts. Multi-car discounts may lower the overall premium compared to insuring each vehicle individually with a single provider.
• Flexible cover. Just because you have a single policy for multiple cars, doesn’t mean you need a single level of cover. This means you could get comprehensive cover for your new car, and potentially get a lower level of cover such as Third Party Property Damage (TPPD) for older vehicles.

• Policy limitations. You generally need to meet eligibility requirements. For example, all individuals on a policy typically need to live at the same address.
• Having a shared policy. While convenient, having a shared account can impact the cost of your premium, as each person’s driving history affects the overall cost. Also, if only one vehicle is eligible for a certain discount, it probably won’t be applied across the policy.
• Difficulties adjusting your policy. To add or remove a car from your policy, you typically need to contact your insurer directly. Your car insurance premium may also need to be recalculated after any changes are made.
• Limited options. Multi-car policies are not commonly sold by insurers. This means instead of being able to compare prices across providers, you may be limited by your options and end up paying more than you would with individual policies.

While a multi-car insurance policy can be cheaper than taking out multiple individual policies with a single insurer, there may be more value in taking our multiple individual policies with different insurers. Whether multi-car or standard car insurance is right for you may be influenced by factors such as:

• The car insurance company
• The type of car
• Who is listed on the policy.

It’s also worth weighing up the potential discounts of having a multi-car policy, versus what discounts you may be eligible for if you purchased separate policies instead. Using Compare the Market’s comparison service, you can compare individual policies in just minutes.

There are a few ways you could save on your car insurance premium. However, be aware that you may not be eligible for some discounts under a multi-car insurance policy that you would be with a standard policy. Ways to save may include:

• No-claims discount. If you don’t make any claims in a year, your provider may offer a discount. This discount can increase for each year you don’t claim, up to a certain limit.
• Multi-policy discount. If you choose to get multiple insurance policies with the same insurer, you may get a discount. For instance, if you took out car insurance and home and contents insurance with the same insurer, a discount may be applied to both policies.
• Online discount. If you buy your policy online, you might get an online discount, depending on the insurer. This is typically a one-off, but in some cases, it may be an ongoing discount.
• Paying annually. Another way to save is by paying your car insurance premium annually. Customers who pay their premiums as a lump sum instead of paying monthly will often receive discounts on their insurance premium.
• Increasing your excess. Your excess is the amount you pay towards a claim in the event of an incident. Increasing your excess amount may lower your premium. However, make sure you choose a manageable excess amount in case you need to claim.