Changes To The NC Personal Auto Insurance Mult-Car Discount

The multi-car discount is one of those discounts that is nearly universal for families and as such, no one thinks much about it.   The savings presented by this discount generally runs in the 20% to 25% range but for the most part, most people won’t notice it unless it is taken away.  And for some families in NC this is just what is about to happen.

There is a strong underwriting logic behind the multi-car discount which has been part of the NC personal auto insurance policy for more than 40 years.  This logic is that when you have more than one car in the household, then there will be times when both of drivers will be riding together in the same car.  That means that the other cars on the policy are not being used at that time and for that you deserve a lower rate than the policyholder who only owns one car and that car is used for each and every errand.

As times have changed and more households have become two income households, one phenomenon that has occurred is that some households wanted separate policies for their own cars so that they could pay their bills separately from one another.  This approach of I pay for mine and you pay for yours has created  the need for two different auto policies in the same household.   If you think about it though,  even when this happens, the underwriting logic of the multi-car discount is still and so this household still deserves the multi-car discount on both auto insurance policies. And  Insurance companies have generally adapted to this new financial reality and happily applied the multi-car discount to both policies even though each policy may only have one car listed on it.   But those rules have now changed.

Effective March 1, 2012, the NC Rate Bureau has issued a revision to Rule 4.D which clarifies the intent of the multi-car discount.  The Rate Bureau now requires that there be two or more cars listed on a North Carolina personal auto insurance policy in order for the discount to be allowed.  So the two budget households with two different auto policies will be in for some sticker shock when their auto insurance policy renews the next time.  Losing this discount will generate an additional rate cost of up to 25% on each policy!  Will the additional costs of insurance force the separate budget households to cozy up a bit more with one another?  I’m betting that it will.

This new rule change does have a few exceptions.  For instance, in NC, state law limits then number of vehicles that you can put on a personal auto insurance policy to 4.  So, households with a 5^th car or even more, will have to purchase a second auto insurance policy.  When this happens, the multi-car discount is allowed to be applied to both policies as one of the rule exceptions.  The other exception happens when one of the cars is co-titled in another name of a policyholder in the household.  If this exception exists, then the multi-car discount can be allowed on both policies.

At Clinard Insurance Group, located in Winston Salem, NC, we insure thousands of vehicles for families all across North Carolina and South Carolina.  We try very hard to keep the insurance buying public informed of changes in the industry so that they can be more informed consumers of insurance.  If you would like help or advice with your auto insurance, your home insurance, your life insurance or even your business insurance, I hope you will call us toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.