Can I Get Two Car Insurance Plans from Two Different Insurers?

In India, it is mandatory for car owners to have third-party car insurance. However, since these plans do not offer protection to their car or cover damages if they get physically injured, some people opt for comprehensive plans. 

These plans reimburse any costs associated with repairing or replacing parts of your car if it is damaged in an accident, natural disaster, man-made disaster, and other acceptable causes. So, for example, if your car meets with an accident and the cost of repair is, say ₹10000, then the insurer will ensure that you get the amount after some pre-agreed deductions. 

So, can you buy two insurance for a car from two different insurers for the same car? What will be the implications? Let’s find out.

There are two aspects to this question:

• Buying two car insurance plans from two different insurers for the same car
• Raising a claim for the same damage with two different insurers

Let’s look at both points in detail.

Buying Two Motor Car Insurance Plans from Two Different Insurers for the Same Car

Can you buy two car insurance plans from two different insurers for the same car? The answer is yes. It is not illegal to buy two car insurance policies for the same car. However, you need to ensure that this is not in violation of any terms specified by either insurer. While the insurer might not be aware of it when you buy it, if it comes to the insurer’s knowledge at the time of processing a claim, then you might experience claim rejection. 

Buying Two Different Motor Car Insurance Plans from Two Different Insurers for the Same Car

If you have a third-party car insurance plan from one insurer and you realise the importance of having an own-damage cover for your car as the third-party cover does not insure damages to your car. In that case, you can research and decide to buy an own-damage cover from a different company that you think is right for you.

In this case, if you face an accident on the road, you can claim from both parties. You can claim the third-party damage from your first company and the own-damage cover from the company you bought it from. 

Raising a Claim for the Same Damage With Two Different Insurers

This is where things get risky. While there is no law against buying multiple car insurance policies for the same car, if you try to receive compensation from both insurers for the same claim, then you would be held accountable by the law.

When insurers find out that you have multiple policies, they might reject your claim and ask the other insurer to process all claims in the future. Also, if you claim the full amount from both insurers, then it will be considered a fraudulent activity under the law.

Further, two insurance policies would mean two premiums, but you wouldn’t be able to claim twice the amount. Hence, it would be financially irresponsible to buy two car insurance policies from two insurers for the same car.

Accidental Purchase of Two Car Insurance Policies

There can be situations where car owners accidentally end up with two car insurance policies for the same car. This can be third-party car insurance or comprehensive car insurance. Some such instances are:

• When car owners switch the insurance company, there can be times when they have two policies active on the same car by two different insurers. Since this is not illegal, there is no cause for concern. However, if the car meets with an accident during this period, then the car owner must raise a claim with one insurer only.
• Purchase of additional policies for breakdown cover or personal accident cover. Insurers offer add-ons that offer these covers. However, some car owners are unaware of the add-ons and tend to buy two policies to meet their requirements.
• Erroneous purchase of the second policy because the car owner was not aware of the expiry date of the original policy. Remember to check the car policy renewal date so that this does not happen to you. 

Disadvantages of Having Two Car Insurance Policies on the Same Car

• While having two policies would double the premium payment, your insurance cover cannot be doubled. Hence, you will be paying twice the amount for the same coverage.
• If you file a claim with both insurers for the same claim, then you will commit fraud in the eyes of the law. This could result in legal proceedings and the cancellation of your policy.
• Even if you are filing partial claims with both insurers, one provider can reject your claim and ask the other provider to process all claims in the future.

Summing Up

While buying two car insurance policies from two insurers for the same car is not illegal, it can only result in an added financial burden with no apparent benefits. Also, filing a claim with both the insurers for the same damage will be illegal. 

Hence, it is not advisable to double insure the car unless the policies have been opened erroneously for reasons mentioned above. Hence, if you need added protection, look for add-on covers and create a customised policy that meets your requirements. 

You can also look at the range of measures that you can take to reduce the premium of your car insurance plan. Remember, comprehensive car insurance protects you against financial losses arising from damages to your car and third-party property. So research the market, compare car insurance and choose the best one for your car. Also, ensure that you renew your car insurance policy on time. Good Luck!