If I own 2 vehicles and am the only driver, I can only drive one of them at a time. Why then, must each vehicle be insured (liability only) that basically doubles my premium? If I am driving one, I certainly can cause no personal or property damage with the other. And, I am still only driving the same amount of time/same amount of miles. Is there anyone that can honestly explain this insurance phenomona to me that makes any sense other than the insurance companies making money? This is in the state of MN... and this is exactly what insurance is doing to me.
As another answer indicates liability insurance is mandatory in MN on all cars you own. Thats the easy answer.
The more complex answer is that it has to do with risk associated with each individual vehicle. An insurance company will normally have two different liability rates for two different vehicles. Each vehicle comes with it's own liability risks. (sports cars & 4x4's are more costly to put liability coverage on because statistics show they are involved in more accidents.)
When I lived in Northern MN I had the mandatory 4x4 truck and also a car. There was a big difference on the cost of liability coverage on both vehicles. The 4x4 was much more expensive.
When you own 2 cars the insurance company has no idea which one you will be driving at any given time. That drastically changes the risk involved in providing coverage to you. The only accurate way to price a cars liability coverage is to do it individually.
I would bet that if a company offered 1 policy that would cover any 1 vehicle that you owned at any time you would pay a lot more than you are now. They would charge more because of the unknown risk factor that they would never know what car you were driving.
With insurance being mandatory on all owned cars it also helps deal with the issue of a person who has an extra, but uninsured car, and borrows that uninsured car to a friend who then has an accident. I've been a claim adjuster for 20 years and I'm in favor of anything that reduces claims caused by uninsured vehicles.
Problem is, most people that have 2 cars have 2 drivers. They just arent telling the insurance co about the other driver.
Also, those cars are covered for anyone thats driving them with your permission. So if you have a friend borrowing one car while you drive the other... them both are on the road increasing the liability the insurance co is taking on.
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