Can I take out two car insurance?
If you already understand the importance of auto insurance, perhaps you have considered what happens if I have two auto insurance?
That’s right, two car insurance for one car, you might think it’s double protection, but think about it.
Yes, it is possible to take out two auto insurance policies, but only in specific scenarios. Otherwise, you could get in trouble.
This situation is called insurance competition, defines as:
“The fact that there are two or more policies contracted, by the same insured, covering the same assets and against the same risks”, according to the definition of Master Jorge in the Compendium of Damage Insurance Terms.
WHAT DOES THE LAW SAY ABOUT HAVING TWO CAR INSURANCE?
The Insurance Concurrence is handled in the Law on the Insurance Contract in Mexico.
This Law establishes the following:
Art. 100. When insurance against the same risk and for the same interest is contracted with several companies, the insured will have the obligation to notify each of the insurers of the existence of the other insurances.
The notice must be given in writing and indicate the name of the insurers, as well as the sums insured.
Art. 101. – If the insured intentionally omits the notice referred to in the previous article, or if he contracts the various insurances to obtain an illicit profit, the insurers will be released from their obligations.
Article 102. The insurance contracts referred to in article 100, entered into in good faith, on the same or on different dates, for a total sum greater than the value of the insured interest, will be valid and will bind each of the insurance companies up to the full value. of the damage suffered, within the limits of the sum that they would have insured.
Article 103. The company that pays in the case of the previous article, may repeat against all the others in proportion to the sums respectively insured.
Article 104. The insured who enters into new contracts, ignoring the existence of previous insurance, will have the right to rescind or reduce the new ones, provided that he does so within fifteen days following the date on which he became aware of the other insurance. The rescission or reduction will not produce effects until the expiration of the insurance period in which they were requested.
What does this all mean?
The AMIS states that articles 102 and 103 establish that, if the contracts were entered into in good faith by the contracting party and the insured, both policies are valid and the insurers must cover the sums insured.
That is, if it was done in good faith, all the insured must cover the full value of the damage suffered.
The latter, however, is always within the limits of the sum insured.
That is, among all the insurers they will cover apart until they cover the total of the insured sum.
The foregoing is to prevent an insured from charging twice or more for the same claim.
For example, if a total loss is declared, you will not receive two cars, but the insurers will indemnify one car.
SOME SCENARIOS WHERE IT IS POSSIBLE TO CONTRACT BOTH INSURANCES
The scenarios where it is possible in which you do not want to be left unprotected in the face of the eventual expiration or cancellation of the policy.
Or, in the given case you can take out two different policies, which complement each other.
Although this last case is not so common, there may be scenarios in which it happens.
For example, if you have a basic policy and want to take out other insurance to protect special equipment in your car.
Now we will see a little more detail about what these two different scenarios consider.
FROM AUTO INSURANCE TO COMPLEMENT DIFFERENT POLICIES
This is one of the most common scenarios in the past but currently has fallen into disuse.
This is mainly because insurers, being aware of this, have modified and increased their offers.
All for the sake of users being able to contract the most complete coverage for their needs.
Before, this method of contracting two insurances for the car consisted of the user being well informed and contracting the two policies with the aim of complementing one another.
Or when, due to the professional work of the driver and the use of the vehicle, he ended up with two insurances.
For example, a few years ago, Uber and Cabify drivers had to take out extensive coverage insurance for themselves, however, it could be invalidated when boarding other passengers in exchange for an economic gain; the reason why Uber and Cabify granted them another insurance to protect the passengers.
As you can see, by covering different risks and complementing each other, in this case, the concurrence of insurance does not enter.
AVOID BEING LEFT UNPROTECTED IN THE EVENT OF CANCELLATION OF A POLICY
This scenario contemplates the possibility that you decide to cancel a policy, but before doing so, contract another to protect yourself.
Let’s say it’s the beginning of the month and your car insurance expires on the 31st, and you don’t plan to renew it.
You can inform the current insurer in advance that you will no longer renew the car insurance, and hire the new insurance as soon as possible so as not to be left unprotected, in this way, for a short period of time you can have two insurance policies.
You can even arrange for the new policy to be activated the same day the old one expires and be protected.
AT WHAT POINT IS IT FROWNED UPON OR PROHIBITED TO HAVE TWO CAR INSURANCE POLICIES?
But, you should know that there are times when having two auto insurance policies is frowned upon or even prohibited.
When the insured acts with intent and does not inform any of the insurers of the existence of previous policies.
It is included…
THE TWO COMPANIES MAY NOT MAKE ANY PAYMENTS
However, the main risk is that if you have two car insurance, no insurer wants to make the payment.
And it is that before the existence of the double policy, each company could try to throw the ball to the other.
Or, arguing both policies canceled each other and refused to indemnify the loss.
WHAT TO DO TO AVOID PROBLEMS?
In case you want to contract two car insurances, or already have them, these are some measures to take:
- Before taking out two Rebuilt auto insurance policies, discuss them with both insurers and verify that they do not cancel each other out.
- Argue very well what are the reasons why you want to have two insurances, and how they complement each other.
- If it was a mistake, discuss it with the company that you like their offer the most, and they can advise you on how to proceed.
The most important thing when thinking about or having two auto insurance policies is transparency.
If the insurers even suspect that you did it to obtain a financial good, rest assured that they will not be held responsible.
However, if you can explain that everything is a misunderstanding or a conscious and well-informed decision, in which both coverages are going to complement each other in a good way, you could have two auto insurance policies without any problem.
COINSURANCE OR A SUPPLEMENT TO THE POLICY
Under the concept of coinsurance, two companies agree on how they are going to supplement the policy in the event of a claim.
Either through the proportional payment of the claim or that, each one is in charge of a different scenario.
For example, I have my resident car insurance with insurer X and it covers claims in Mexico.
But, in that same policy, I have coinsurance with company Y for claims in the United States and Canada.
In other words, I have two auto insurance policies, from two different companies, but each one handles different scenarios.
IF YOU HAVE QUESTIONS, REMEMBER THAT AT ARCA WE CAN ADVISE YOU
If you are in ARCA, you probably already understand the importance of having auto insurance.
And, as our mission is to help you find the best, even if you don’t contract it with us, we have specialized advice without commitment on your part; And remember that if you open a free account with us, you can upload all the policies of all the insurance you have contracted.
If you have one or more auto insurance policies, upload them to your account and talk to our advisors.
We can help you resolve any questions you have about it.