What is a Multi Vehicle Discount on a Car Insurance Policy?
Answer:
Saving money on car insurance for several cars


is one way to reduce the spiraling costs of vehicle insurance today, but just like making any purchase, do your homework before you sign on the dotted line.

Some companies offer a “discount” that applies to their rates, but other companies might have a better rate without the discount. Too often, buyers take the advertised “discount,” and don’t follow up with companies actually carrying lower rates.

According to some insurance companies, a buyer can save as much as 20-to 40-percent insuring more than one vehicle, but shop around before deciding on the insurance of choice. These rates are not always based entirely on multivehicle discounts, but can include switching one’s car and homeowner’s insurance to the new company.

Another factor that figures in to the cost and percentage of discount allowed is the make and model of vehicle. Insurers have to estimate in the underwriting process the cost of the buyer’s insurance, administrative costs and the amount of profit for the company. These estimates are dependent on the losses and claims history of individual makes and models of vehicles. For example, last year perhaps the track record of losses and claims for policyholders owning Toyota Camry, outweighed those of Honda Accords. This results in more beneficial rates for Accord owners.

This could mean the buyer’s rate for adding another vehicle from the company offering the discount might be more than what that buyer could get from a company without a multivehicle discount. Buyers need to first get and compare quotes before making a decision.
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