Bundling auto insurance coverage, where you cover multiple cars under the same policy, is always touted as a way of enjoying low insurance rates. While this may be true in some cases, there are also cases where it doesn't make sense. Here are some of the cases where you should think twice before bundling coverage.

If One Car Requires Specialty Coverage

Some covers have unique risks that require specialty coverage; their risks cannot be adequately covered by standard auto insurance coverage. For example, an antique car may be difficult and expensive to fix in case of damage because its spare parts may be rare and out of production. Such a car may also be more valuable than a regular car of the same size or purpose.

This is why auto insurance companies offer specialty coverage for such cars. Specialty coverage is designed to cover the unique risks of these cars without sending premium rates through the roof. If you have such a car (other examples include recreational vehicles or all-terrain vehicles), you should look for a car insurance company that offers specialty coverage (not all do). Don't automatically bundle it with your regular car because the rates may not be friendly; this is especially true if your regular car insurer doesn't have a dedicated division for specialty cars.

If One Driver Is High Risk

Bundling auto insurance coverage may also work to your disadvantage if one of you is a high-risk driver. This is because the high-risk drive designation can drive up your rates through the roof. Take an example where you have a partner with a bad driving history – a DUI (driving under the influence) conviction, several traffic tickets and a gap in coverage. Bundling your coverage with such a driver may see you paying high premiums because their high-risks affect your rates too. In such case, it is in both of your interests to secure separate policies.

If Doing So Reduces Your Coverage

Lastly, it may also not be a good idea to bundle your insurance if doing so would reduce the coverage available to one of your cars. Consider an example in which you have bought commercial auto insurance coverage for your bakery truck, and you want to buy a compact car for your personal use and insure it with the same carrier. In such a case, you might find that bundling the two vehicles into one insurance policy would give you a more limited coverage on the personal car than you would get with a dedicated personal auto insurance from a different carrier.  

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