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I live in the US (Illinois).

If I have 2 cars, and:

For car #1, insurance company "A" has a better rate, and for car #2, insurance company "B" has a better rate.

Assuming the difference in rates is more than the multi-car discount of either insurance company, it might be cheaper to insure each car with a different insurance company.

Some time ago, I had heard that this was not allowed... that you had to use the same insurance company for all your vehicles. But, I don't remember where I had heard that, or if it was accurate, or if it might apply to Illinois, or not.

Is it legal to insure each car with a different insurance company?

To be clear, I am not talking about "Double insuring" a vehicle, and I'm not talking about splitting liability and collision/comprehensive coverage on the same vehicle between 2 different insurance companies... 2 cars, 2 insurance policies, one insurance policy with full coverage (liability and collision/comprehensive) for each car.

Also, the question is not about whether or not an insurance company might not like you to do this, or whether doing it might be problematic. The question is, is it legal to do it. In other words, are there any laws or regulations that would prohibit this.

And to further clarify, that could be laws or regulations preventing an insurance company from this, or laws or regulations preventing a person from obtaining insurance this way.

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    Why don't you ask the insurance companies and let us know? If it's not legal ask them to direct you to the statute or regulation that forbids it.
    – feetwet ♦
    Aug 10, 2015 at 19:29
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    Collision covers a car, but liability covers a driver. Which one pays in the event you have an accident in a rental car? Show the favorable quote to each other company and straight up ask them each to match the other.
    – user662852
    Aug 10, 2015 at 20:44
  • @user662852 - "..accident in a rental car?". I'd guess the one where the claim is filed. When renting a car, they ask for your insurance and I suppose you just pick one to give them, perhaps taking into consideration why you are renting a car (renting because one car is being repaired...). Later, if there's an accident and you need to file a claim, you'd use that one. If you drive a company owned car with insurance paid for by the company, and you pay for insurance for your own car, you still have this sort of dilemma with a rental car. Your "price match" suggestion is certainly a good option.
    – Kevin Fegan
    Aug 10, 2015 at 21:32
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    I'm voting to close this question as off-topic because it doesn't appear to be about the law at all. It is asking if it's ok to purchase insurance in a capitalist market based economy where competition is promoted. "Is this allowed" does not mean is this legal? Or are their regulations banning this practice? Even if the question could be reframed to appear legal in nature, it's not something that most anyone is going to find useful, as an answer would be no more than "Yes, this is allowed".
    – gracey209
    Sep 8, 2015 at 16:58
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    I think it's a legitimate question and that the reason it seems off topic is that no one knows the answer. If the answer was, "yes that's illegal, see statue blah blah," or if the answer was, "no, it's not illegal, in fact insurance companies are legally barred from... whatever," - if we had an answer it would seem on topic. Or rather, it would not seem off topic. Does the fact that lawyers can't answer a question make it not a legal question?
    – jqning
    Sep 12, 2015 at 2:59

3 Answers 3

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Look at companies such as Haggerty that insure only classic and low mileage cars. They have no issue giving full coverage on your classic car while at the same time you keep your daily driver with another company.

Since this is the business model of an entire group of companies that specialize in specialty vehicles, I would think it would be legal.

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There are no laws against what you are proposing.

However, you might find in practice that it is impossible: I.e., no insurer will sell insurance on one car knowing that your "household" owns and drives another car that they do not insure. There might be some adverse selection argument for this sort of policy, but that's something for the insurer to explain.

Note that there are laws (like fraud, and sometimes insurance-specific statutes) against knowingly misrepresenting risks to a contractual counterparty like an insurer, so if as a condition of selling you insurance they require you to disclose all vehicles and drivers in your household it could be illegal to not provide full disclosure.

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    I appreciate that you took the time to answer my question. "... no insurer will sell insurance on one car knowing that your "household" owns and drives another car that they do not insure." Let's say that in my "household", there are 4 adult drivers and each driver owns their own car, and one driver owns 2 cars. In addition to the context of my posted question (the driver that owns 2 cars), are you saying that no insurer will write a policy unless all individual cars/drivers are insured by them?
    – Kevin Fegan
    Sep 12, 2015 at 23:18
  • @KevinFegan: I never got far enough into auto insurance to know, so you'll have to ask potential insurers about these specific scenarios. If you get the same answer from 3 or more insurers I would then assume it's standard underwriting practice. A good salesman will either himself know why the practice exists, or will be happy to ask the underwriters for an explanation. Again, my hunch is that there's a potential adverse selection problem, but I'd love to hear what you find out.
    – feetwet ♦
    Sep 12, 2015 at 23:31
  • In the UK, your insurance cover starts when you buy the car and usually runs a year at a time. If my wife and I buy two cars at different dates (which we actually did), that would mean that we could never switch to a different insurance when one of the two contracts runs out. Which would seem ridiculous.
    – gnasher729
    Sep 16, 2015 at 23:20
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    @gnasher729 - At least in the U.S. insurance is always pro-rated. I.e., you can terminate or change a contract at any time, and you only have to pay the premium for the period during which the insurance was in effect. So when you add a car to an insurance policy typically they cancel the old one and issue a new policy covering both cars.
    – feetwet ♦
    Sep 17, 2015 at 0:35
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Insurance companies can definitely insure a single vehicle, what they don’t do is insure a single driver — if you have someone in your household who you are authorizing to drive your vehicle on a regular basis, they will want to know about it. If you don’t tell them, in the case of an accident they may disallow your claim.

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