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Can I Have Two Car Insurance Policies from Two Different Companies?

Updated On Oct 15, 2023

Two Insurance Policies On The Same Car

Our fast-paced way of life and growing reliance on cars mean that we need comprehensive insurance to protect us from any unanticipated hardships. In India, the Indian Motor Vehicle Act, 1988 makes it compulsory to buy auto insurance making it an important financial safety tool. Every vehicle operating on Indian roads is required to carry insurance, as is widely known, but an often-asked question is, "Can I have two car insurance policies from two different companies?" Let us examine the nuances of this issue in order to provide the Indian public with clarification and direction.


Recognising the Standards

Historically, having multiple auto insurance policies has been regarded with suspicion, mainly due to the possibility of fraudulent claims and abuse of the insurance system. Nonetheless, the uncertainty surrounding this issue necessitates a more thorough examination of the laws controlling the auto insurance industry in India.

Can I Have Two Car Insurance Policies from Two Different Companies?


Types of Car Insurance Policies Available

It is essential to understand the three main types of auto insurance in India, Third-Party Insurance, Standalone Own Damage Insurance, and Comprehensive insurance, before delving into the specifics of owning numerous policies.

  • Third Party Insurance:

Every car owner in India is required by law to have a minimum of one third-party insurance policy. This coverage shields you from any monetary obligations resulting from property damage, vehicle damage, accidental bodily injuries and accidental death to a third party. It does not pay for losses or damage to the insured car itself.

  • StandAlone Own Damage Insurance:

While buying a new vehicle, vehicle owners have to buy long term third party insurance (3 years for Car, and 5 years for Bike) hence to safeguard their own vehicle, they have to buy Standalone Own Damage Insurance. This type of insurance safeguards their own vehicle against any damage that might arise

  • Comprehensive insurance:

This type of insurance protects you against both third-party liability and financial losses resulting from damage to your own car. It combines own-damage coverage with third-party insurance.

Now that we have a firm understanding of the fundamentals, let's examine the potentiality and consequences of owning two auto insurance plans from separate insurance providers.

The Justification for Several Policies

Taking out numerous insurance policies could be a good idea in theory for a number of reasons, such as having greater coverage, protecting oneself from having a claim denied, or taking advantage of the benefits that different plans may provide. Nevertheless, a thorough examination of this move's viability and constitutionality is required.

Is it legal to have more than one car insurance policy?

Having more than one insurance policy for a single car is not expressly forbidden under Indian law - Legally you can buy more than one policy either from the same insurer or from a different insurance company. This approach, however, is discouraged since it creates opportunities for fictitious claims, and also by doing so, you will end up violating the terms of one or both insurance companies. 

To protect their interests, insurance firms have put in place a network and system to prevent duplicate claims. Furthermore, you are not permitted to submit a claim for the same loss or injury under both policies. It would seem from this that having two policies would not result in a payout greater than the actual loss suffered, hence there would be no possible "benefit" to having two plans. 

Let’s try to understand through an example -

If suppose, you buy 2 car insurances worth Rs 8,000 each and your car gets into an accident. The cashless garage or workshop says that your claim will be of Rs 15,000, in this case the maximum amount that the insurer will pay for the claim is going to be Rs 15,000 only. While you will be spending Rs 16,000 (Rs 8,000 * 2 policies) on buying your car insurance

In this case, even if you would have bought one policy worth Rs 8,000, still a claim settlement of Rs 15,000 would have been done. Hence, you can clearly see that there’s no benefit of buying 2 policies since the claim will be settled only once to the amount of damage incurred.

Is Double Insurance worth it?

  • Settlement of Claims:

Resolving a claim can be a laborious procedure if you choose to purchase two policies. There may be differences in the terms and conditions between the two companies, which could cause arguments and cause claim settlements to be delayed.

  • Extra burden on your wallet:

Paying premiums for two insurance could result in increased out-of-pocket costs without providing appreciable extra benefits. This is known as the premium outgo.

  • Administrative Hassle:

There is more administrative labour involved in managing two policies. Paying premiums, paying renewal dates, and being aware of all the terms and conditions of both policies can be quite time-consuming.

  • Possible Legal Repercussions:

Should the insurance companies find any inconsistency or malpractice, the policyholder may be subject to legal proceedings, which may include being accused of trying to commit fraud.

A Practical Solution to Avoid Buying Two Policies

Sticking to a single comprehensive insurance coverage that meets your needs would be more practical given the difficulties and issues that could occur. You might think about enhancing your coverage by including riders or add-ons to your current policy. You can get the extra safety net you need from a variety of add-ons that are available in the Indian market, such as roadside assistance, engine protection insurance, zero depreciation policy, etc.

Even after all this, it could still be a case that you mistakenly buy two insurance policies for the same vehicle or accidentally purchase two car insurance policies with overlapping dates. Overlapping between two policies can happen when you are switching insurers or switching between two policies especially when you might have multiple vehicles at your home.

In order to avoid any duplicate policy buying or policy overlap, you must do the following - 

  1. Check your existing policy in detail especially check for when is your policy going to expire
  2. Ensure that you have the necessary add-ons present in the policy that will cover your car in the most comprehensive manner
  3. If you have a bigger family / if you carry passengers and you want a personal accident cover for all travelling passengers, buy an additional passenger cover add-on instead of buying a separate policy.


Some Advice for Proper Comparison of Insurance Coverage Policies

  • Compare policies:

Make sure to evaluate the many insurance policies on the market before choosing one. To help you decide, consider the features, benefits, and premium costs.

  • Seek Professional Advice:

Do not be afraid to consult insurance consultants if you are unsure about the different options available. They can help you identify the coverage that best meets your needs.

  • Periodic Review:

As life changes, so do your insurance needs. Therefore, it is wise to regularly check your policy and make any required adjustments to ensure optimal coverage.

  • Use No Claim Bonus (NCB):

If you drive safely and haven't filed any claims during the policy's duration, you may be able to accrue a No Claim Bonus, which can lower your future premium costs dramatically.


Final Thoughts

Although owning two auto insurance plans from different companies isn't specifically forbidden by Indian law, it's unwise to take this course of action considering the possible complexities and scant rewards. Instead, the emphasis should be on locating a strong, complete insurance with appropriate add-ons that offer wide coverage without breaking the bank.

Keeping up with the latest developments in India's dynamic motor insurance market might help you avoid financial losses as well as potential legal issues. Recall that the purpose of insurance is to provide security and comfort and that sometimes less really is more.


  1. Can I have multiple car insurance policies?

The answer is that you are not strictly prohibited by law in India from owning two policies for separate auto insurance providers. However, because of the possibility of fraud and the issues that could come up during the claim settlement process, this practice is typically discouraged. Additionally, you would end up paying double the premium for getting the same benefits, hence there’s no benefit that comes from buying multiple car insurances.

2: In the event of an accident, may I make simultaneous claims for compensation under both policies?

No, you are not eligible to get reimbursement from both policies for the same loss or damage. It is not possible for the reimbursement to surpass the actual loss incurred, even if you have two insurance. This could be construed as fraud and lead to legal issues.

3: Would having two insurances offer more comprehensive coverage?

The answer isn't always that. Although having two policies may appear to offer greater coverage, doing so may result in a more difficult claims procedure without providing anything more in the way of benefits. It is preferable to improve your coverage by adding the appropriate riders or add-ons to a complete policy. Secondly, you would unnecessarily have to pay more for fulfilling your same insurance needs, hence two insurance doesn’t mean more coverages.

4: What drawbacks come with owning two auto insurance policies?

Among the difficulties are a convoluted claim settlement procedure, increased premium costs, administrative burdens, and even legal ramifications should the insurance companies uncover inconsistencies or malpractices.

5: Does having two auto insurance policies cost more money?

Yes, keeping two auto insurance plans will need you to pay premiums for each, which might greatly raise your out-of-pocket expenses without providing benefits that are commensurate.

6: Can I choose between two different insurance plans for the same vehicle?

In theory, you are able to own both a comprehensive policy (which covers third-party coverage) from one business and a third-party policy from another. However, because of the difficulties it can cause with claim settlements, this strategy is not recommended and is not feasible.

7: Is getting two auto insurance coverage a better option?

Choosing a comprehensive auto insurance policy that meets your needs and adding riders or add-ons that provide extra coverage based on your particular demands is a better option.

8: Is it possible to have the best coverage without getting two insurances?

In order to guarantee the best possible coverage, compare insurance carefully, think about adding pertinent add-ons, and, if needed, consult an expert. Making regular policy reviews and adjustments can also aid in keeping your coverage at its best.

9: How does the Motor Vehicles Act of 1988 function in this situation?

The Motor Vehicles Act of 1988 states that all vehicles must carry a third-party insurance policy at the very least. It does not, however, offer clear instructions on maintaining several insurance policies for the same car.

10: If I have two policies, can I transfer my No Claim Bonus (NCB)?

In most cases, the policyholder is linked to the No Claim Bonus (NCB) rather than the vehicle. On the other hand, transferring or accruing NCB might get complicated if you have two plans. If you want to save and use the NCB wisely, you need stick to one policy.


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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