Updated 05/03/2021
Before we discuss who a car insurance family plan covers and how it works, let’s explore the six types of car insurance available to drivers, so you can gain a better understanding of each.
1. Liability
Liability insurance is the most important coverage option that drivers need and is required by most states. If you’re found responsible for causing a crash, this type of coverage pays for bodily injuries sustained by anyone involved in the accident and any property damage you cause.
Every state has minimum liability insurance limits you need to have to drive legally. A state that requires you to have a minimum coverage of 25/50/10, for example, expects your insurer to pay a maximum of $25,000 for bodily injuries sustained by each person involved in a crash you cause, with a total of $50,000 being the most it will pay under the policy. If you cause property damage, your insurer must pay up to $10,000 to cover the costs.
When it comes to liability insurance, it’s generally a good idea to have higher limits than just the minimum because covering costs related to bodily injuries and property can be fairly expensive.
2. Medical Payments or Personal Injury Protection
Where liability insurance covers bodily injuries sustained by others, both medical payments and personal injury protection (PIP) coverage pay for any bodily harm you sustain if you cause a crash.
These coverage options can help you reimburse your health insurance for some of the costs involved in treating your injuries, as well as injuries sustained by your passengers at the time of the crash.
If another driver is responsible for a crash, their bodily injury liability coverage must pay your medical bills.
3. Uninsured Motorist Coverage
Uninsured motorist coverage offers a specific amount of money for injuries and property damage you sustain if an uninsured driver crashes into your car, whether it’s parked outside a grocery store while you shop or whether you’re behind the wheel, driving along a city street.
Without this coverage option, you’ll have to sue the uninsured driver for damages. Most uninsured drivers do not have much disposable income. If that’s the case with the uninsured driver who crashed into you, the court might order them to follow a payment plan to compensate you. It’s unlikely you’ll get much money if you go this route, though — you might actually lose money after paying your attorney’s fees.
4. Collision
Collision coverage pays for any repairs your vehicle needs after the crash — specifically, a crash you caused. The payment, however, cannot be higher than the cash value of your vehicle.
This type of coverage has a deductible — that’s the amount you pay, while your insurance company pays for what’s left. So, if you’re responsible for a crash that causes $5,000 worth of damage to your car and your deductible is $1,000, that $1,000 is what you would pay. Your insurer would pay the remaining $4,000.
While most states don’t require collision coverage, your lender — the bank or lienholder — will likely require it, especially if you have a loan on the vehicle.
5. Comprehensive
Comprehensive insurance coverage pays to repair your vehicle up to its cash value when you’re involved in crashes caused by other drivers. Like collision coverage, comprehensive coverage also includes a deductible.
If you have both comprehensive and collision coverage, you have what’s commonly called “full coverage.” If you have a loan out on your vehicle, the bank or service lender will likely require you to have full coverage.
6. Optional Insurance Coverage
Insurers will typically offer to include additional coverage options to your policy, like emergency roadside service and rental reimbursement.
Emergency roadside assistance comes in handy if your vehicle breaks down on the side of the road, needs a tire change, or runs out of gas. Unless you’re an auto club member, calling a tow truck will likely be expensive. If you include emergency roadside service on your policy, you’ll have a specific emergency roadside assistance number printed on your insurance card you can call if you need help while you’re on the road.
If your car is in the shop due to an insurance claim, you’ll likely need a rental car to get around. Most insurance policies don’t normally pay for a rental car, but yours will if you include rental reimbursement. This coverage option lets your rent a vehicle for a specific number of days with a maximum price per day. It can be a big help if you need to run errands or go to work while your car’s being repaired.
Understanding a Car Insurance Family Plan: Who It Covers and How It Works?
Now that you’re familiar with the kinds of car insurance available to all drivers, let’s take a closer look at the basics of a car insurance family plan, including who it covers, how it works given the insurance options available, and what are the benefits.
Who Is Covered by a Car Insurance Family Plan?
As we stated earlier, a car insurance family plan extends coverage to multiple drivers who share the same household.
Couples often use this form of multi-car insurance, typically sharing the same policy as either car insurance for two cars or for multi-car insurance for two drivers.
Parents who are already covered by a car insurance family plan can add their teens to the policy once their children start driving. Adult children can also be included in your family plan along with other relatives if they share the same house with you.
While this might come as a surprise, you might also be able to get a multi-car insurance policy, such as a car insurance family plan, with your roommate. As long as everyone lives under the same roof, they can be on the same plan.
How Does Coverage Work Under a Car Insurance Family Plan?
A car insurance family plan is similar to standard car insurance, but you should know a few details on how it actually works. Because this is a multi-car insurance policy, the same liability coverage applies to all of the cars you insure. It can get more specific than that.
For starters, your auto insurance company will likely require you to name a primary driver for each vehicle. That person’s typically the main policyholder. That means that if you, as the primary policyholder, drive your spouse’s SUV or your teen daughter’s car, you’ll have the same coverage as if you were driving your own vehicle, no matter the risks you encounter on the road.
Another detail worth noting is that most insurance companies will let you choose the coverage options you want for each car on your policy. Say you just bought the new SUV that your spouse drives every day to get to work during the morning rush hour. Because this SUV’s still new, you might want to add as much protection as possible against theft and crashes, particularly if uninsured or underinsured motorists cause those crashes. For this vehicle, comprehensive and collision coverage might work best, so that’s noted on your policy. Your teen daughter is also on the road a lot, driving to and from school as well as a part-time job she’s got, so even though her car’s a little older and she’s still a new driver, you state on the policy that her car also has comprehensive and collision coverage to make sure she’s well-protected when she’s on the road. Your car, meanwhile, might be two or three years older than the one your spouse drives, but because you’re an experienced driver, you don’t feel you need full coverage. So, you decide to keep it simple and just pick liability coverage for it, which gets noted on your policy.
Remember, as your household grows or changes, so should your car insurance family plan. If your mother moves in after your son or daughter moves away to attend college, contact your insurance company to let them know you need to update your policy, adding your mother as another driver living under your roof.
What Are the Benefits of a Car Insurance Family Plan?
Efficiency and cost savings are two benefits that a car insurance family plan brings.
When you buy this multi-car insurance policy, you’ll notice that managing your auto insurance gets easier. You’ll only have one policy and one payment, so you won’t have to worry about people forgetting to make their payments. This streamlines the process, making insuring your vehicles less stressful.
Also, because most insurance companies reward drivers who insure multiple drivers and vehicles with them, you’ll likely receive a nice discount for your loyalty. Depending on your household’s specific circumstances and demographics, you might also be eligible for other discounts, like low mileage, good students, good drivers, veterans, senior citizens, and college graduates. All those discounts add up and can save you as much as 25% when adding a car to insurance.
Would Multiple Car Insurance for One Driver Be a Better Option?
A multiple car insurance one-driver policy provides coverage for two or more cars if you’re the only person driving them. You can typically add up to four cars to this type of policy, which can save you up to 25% on your premium.
Unlike a car insurance family plan, which covers every driver living under your roof, a multiple car insurance one-driver plan only protects you behind the wheel, whether you’re driving your SUV or your sedan.
This policy might be a good option for someone who collects luxury cars and likes to take each one out for a drive often. It might also work well for someone who collects antique cars and will be the only one who drives them.
How Can I Find the Best Coverage Under a Car Insurance Family Plan?
If you’re looking for a multi-car insurance policy that extends coverage to every driver who lives with you, a car insurance family plan might be the right fit.
To find the best family coverage options available for your household, you can start by shopping around online, browsing the websites of several reputable insurance companies you’ve heard of, and evaluating the plans they offer.
Narrow your selections down by making a list of the insurance companies that best meet your needs. Then consider getting a free quote from each one — this will help you determine which one offers the best rate. If you feel you need additional information, follow up with a phone call and speak with an agent at each company who can address your concerns and answer all of your questions.
Once you find the right insurer that offers the best coverage for your family, you can drive around knowing that — no matter what happens — you’re all protected by the same policy when you’re on the road.
If you are looking for the best car insurance for your needs and budget, you’re in the right place! At Freeway Insurance, we specialize in helping drivers to find the right coverage for them at the right price. Ready for a change?
