diff --git a/index.js b/index.js
index a4585193..3ffe9f8f 100644
--- a/index.js
+++ b/index.js
@@ -7,6 +7,7 @@ var attachMiddleware = require('./lib/attach-middleware');
 var config = require('./lib/config');
 const walkSync = require('walk-sync');
 const VersionChecker = require('ember-cli-version-checker');
+const concat = require('lodash.concat');
 
 function requireBabelPlugin(pluginName) {
   let plugin = require(pluginName);
@@ -22,6 +23,12 @@ function requireBabelPlugin(pluginName) {
   return plugin;
 }
 
+function getPlugins(appOrAddon) {
+  let options = appOrAddon.options = appOrAddon.options || {};
+  options.babel = options.babel || {};
+  return options.babel.plugins = options.babel.plugins || [];
+}
+
 // Regular expression to extract the file extension from a path.
 const EXT_RE = /\.[^\.]+$/;
 
@@ -45,11 +52,19 @@ module.exports = {
       let checker = new VersionChecker(this.parent).for('ember-cli-babel', 'npm');
 
       if (checker.satisfies('>= 6.0.0')) {
-        this.IstanbulPlugin = requireBabelPlugin('babel-plugin-istanbul');
+        const IstanbulPlugin = requireBabelPlugin('babel-plugin-istanbul');
+        const exclude = this._getExcludes();
+        const include = this._getIncludes();
+
+        concat(
+            this.app,
+            this._findCoveredAddon(),
+            this._findInRepoAddons()
+          )
+          .filter(Boolean)
+          .map(getPlugins)
+          .forEach((plugins) => plugins.push([IstanbulPlugin, { exclude, include }]));
 
-        this._instrumentAppDirectory();
-        this._instrumentAddonDirectory();
-        this._instrumentInRepoAddonDirectories();
       } else {
         this.project.ui.writeWarnLine(
           'ember-cli-code-coverage: You are using an unsupported ember-cli-babel version,' +
@@ -96,83 +111,71 @@ module.exports = {
   // Custom Methods
 
   /**
-   * Instrument the "app" directory.
+   * Thin wrapper around exists-sync that allows easy stubbing in tests
+   * @param {String} path - path to check existence of
+   * @returns {Boolean} whether or not path exists
    */
-  _instrumentAppDirectory() {
-    const dir = path.join(this.project.root, 'app');
-    let prefix = this.parent.isEmberCLIAddon() ? 'dummy' : this.parent.name();
-    this._instrumentDirectory(this.app, dir, prefix);
+  _existsSync: function(path) {
+    return existsSync(path);
   },
 
   /**
-   * Instrument the "addon" directory.
+   * Get project configuration
+   * @returns {Configuration} project configuration
    */
-  _instrumentAddonDirectory() {
-    let addon = this._findCoveredAddon();
-    if (addon) {
-      const dir = path.join(this.project.root, 'addon');
-      this._instrumentDirectory(addon, dir, addon.name);
-    }
+  _getConfig: function() {
+    return config(this.project.configPath());
   },
 
   /**
-   * Instrument the in-repo-addon directories in "lib/*".
+   * Get paths to include for coverage
+   * @returns {Array<String>} include paths
    */
-  _instrumentInRepoAddonDirectories() {
-    const pkg = this.project.pkg;
-    if (pkg['ember-addon'] && pkg['ember-addon'].paths) {
-      pkg['ember-addon'].paths.forEach((addonPath) => {
-        let addonName = path.basename(addonPath);
-        let addonDir = path.join(this.project.root, addonPath);
-        let addon = this.project.findAddonByName(addonName);
-        let addonAppDir = path.join(addonDir, 'app');
-        let addonAddonDir = path.join(addonDir, 'addon');
-        this._instrumentDirectory(this.app, addonAppDir, this.parent.name());
-        this._instrumentDirectory(addon, addonAddonDir, addonName);
-      });
-    }
+  _getIncludes: function() {
+    return concat(
+      this._getIncludesForAppDirectory(),
+      this._getIncludesForAddonDirectory(),
+      this._getIncludesForInRepoAddonDirectories()
+    ).filter(Boolean);
   },
 
   /**
-   * Instrument directory helper.
-   * @param {Object} appOrAddon The Ember app or addon config.
-   * @param {String} dir The path to the Ember app or addon.
-   * @param {String} modulePrefix The prefix to the ember module ('app', 'dummy' or the name of the addon).
+   * Get paths to include for covering the "app" directory.
+   * @returns {Array<String>} include paths
    */
-  _instrumentDirectory(appOrAddon, dir, modulePrefix) {
-    if (existsSync(dir)) {
-      let options = appOrAddon.options = appOrAddon.options || {};
-      options.babel = options.babel || {};
-      let plugins = options.babel.plugins = options.babel.plugins || [];
-      let include = this._getIncludes(dir, modulePrefix);
-      let plugin = plugins.find((plugin) => plugin[0] === this.IstanbulPlugin);
-      if (plugin) { // plugin already exists, so amend it rather than adding another one
-        plugin[1].include = plugin[1].include.concat(include);
-      } else {
-        plugins.push([this.IstanbulPlugin, {
-          exclude: this._getExcludes(),
-          include
-        }]);
-      }
-
-    }
+  _getIncludesForAppDirectory: function() {
+    const dir = path.join(this.project.root, 'app');
+    let prefix = this.parent.isEmberCLIAddon() ? 'dummy' : this.parent.name();
+    return this._getIncludesForDir(dir, prefix);
   },
 
   /**
-   * Thin wrapper around exists-sync that allows easy stubbing in tests
-   * @param {String} path - path to check existence of
-   * @returns {Boolean} whether or not path exists
+   * Get paths to include for covering the "addon" directory.
+   * @returns {Array<String>} include paths
    */
-  _existsSync: function(path) {
-    return existsSync(path);
+  _getIncludesForAddonDirectory: function() {
+    let addon = this._findCoveredAddon();
+    if (addon) {
+      const dir = path.join(this.project.root, 'addon');
+      return this._getIncludesForDir(dir, addon.name);
+    }
   },
 
   /**
-   * Get project configuration
-   * @returns {Configuration} project configuration
+   * Get paths to include for covering the in-repo-addon directories in "lib/*".
+   * @returns {Array<String>} include paths
    */
-  _getConfig: function() {
-    return config(this.project.configPath());
+  _getIncludesForInRepoAddonDirectories: function() {
+    return this._findInRepoAddons().reduce((acc, addon) => {
+      let addonDir = path.join(this.project.root, 'lib', addon.name);
+      let addonAppDir = path.join(addonDir, 'app');
+      let addonAddonDir = path.join(addonDir, 'addon');
+      return concat(
+        acc,
+        this._getIncludesForDir(addonAppDir, this.parent.name()),
+        this._getIncludesForDir(addonAddonDir, addon.name)
+      );
+    }, []);
   },
 
   /**
@@ -181,7 +184,7 @@ module.exports = {
    * @param {String} prefix The prefix to the ember module ('app', 'dummy' or the name of the addon).
    * @returns {Array<String>} include paths
    */
-  _getIncludes: function(dir, prefix) {
+  _getIncludesForDir: function(dir, prefix) {
     let dirname = path.relative(this.project.root, dir);
     let globs = this.registry.extensionsForType('js').map((extension) => `**/*.${extension}`);
 
@@ -236,5 +239,22 @@ module.exports = {
     }
 
     return this._coveredAddon;
+  },
+
+  /**
+   * Find the app's in-repo addons (if any).
+   * @returns {Array<Addon>} the in-repo addons
+   */
+  _findInRepoAddons: function() {
+    if (!this._inRepoAddons) {
+      const pkg = this.project.pkg;
+      const inRepoAddonPaths = pkg['ember-addon'] && pkg['ember-addon'].paths;
+      this._inRepoAddons = (inRepoAddonPaths || []).map((addonPath) => {
+        let addonName = path.basename(addonPath);
+        return this.project.findAddonByName(addonName);
+      });
+    }
+
+    return this._inRepoAddons;
   }
 };
diff --git a/package.json b/package.json
index f613d2bf..f1521a8d 100644
--- a/package.json
+++ b/package.json
@@ -37,6 +37,7 @@
     "extend": "^3.0.0",
     "fs-extra": "^5.0.0",
     "istanbul-api": "^1.1.14",
+    "lodash.concat": "^4.5.0",
     "node-dir": "^0.1.16",
     "rsvp": "^4.8.1",
     "walk-sync": "^0.3.2"
diff --git a/test/integration/app-coverage-test.js b/test/integration/app-coverage-test.js
index 87a29f9a..31fc20cd 100644
--- a/test/integration/app-coverage-test.js
+++ b/test/integration/app-coverage-test.js
@@ -18,7 +18,7 @@ let app;
 describe('app coverage generation', function() {
   this.timeout(10000000);
   beforeEach(function() {
-    app = new AddonTestApp();
+    app = new AddonTestApp({ skipNpm: true });
     return app.create('my-app', {
       emberVersion: '2.16.0'
     }).then(() => {
diff --git a/test/integration/in-repo-addon-coverage-test.js b/test/integration/in-repo-addon-coverage-test.js
index f238ef43..65724230 100644
--- a/test/integration/in-repo-addon-coverage-test.js
+++ b/test/integration/in-repo-addon-coverage-test.js
@@ -20,7 +20,7 @@ let app;
 describe('in-repo addon coverage generation', function() {
   this.timeout(10000000);
   beforeEach(function() {
-    app = new AddonTestApp();
+    app = new AddonTestApp({ skipNpm: true });
     return app.create('my-app-with-in-repo-addon', {
       emberVersion: '2.16.0'
     }).then(() => {
@@ -50,7 +50,9 @@ describe('in-repo addon coverage generation', function() {
       expect(file(`${app.path}/coverage/lcov-report/index.html`)).to.not.be.empty;
       expect(file(`${app.path}/coverage/index.html`)).to.not.be.empty;
       var summary = fs.readJSONSync(`${app.path}/coverage/coverage-summary.json`);
-      expect(summary.total.lines.pct).to.equal(83.33);
+      expect(summary.total.lines.pct).to.equal(75);
+      expect(summary['app/utils/my-covered-util-app.js'].lines.total).to.equal(1);
+      expect(summary['lib/my-in-repo-addon/addon/utils/my-covered-util.js'].lines.total).to.equal(1);
     });
   }));
 });
diff --git a/test/unit/index-test.js b/test/unit/index-test.js
index d4f24c22..e6a3ca43 100644
--- a/test/unit/index-test.js
+++ b/test/unit/index-test.js
@@ -11,16 +11,17 @@ describe('index.js', function() {
   beforeEach(function() {
     sandbox = sinon.sandbox.create();
 
-    Index.registry = {
+    Index.parent = Index.project = Index.app = Index.IstanbulPlugin = Index.registry = null;
+    sandbox.stub(Index, 'fileLookup').value({});
+    sandbox.stub(Index, 'registry').value({
       extensionsForType: function() {
         return ['js'];
       }
-    };
-    Index.parent = Index.project = Index.app = Index.IstanbulPlugin = null;
-    sandbox.stub(Index, 'fileLookup').value({});
+    });
   });
 
   afterEach(function() {
+    Index._coveredAddon = Index._inRepoAddons = null;
     sandbox.restore();
   });
 
@@ -38,15 +39,15 @@ describe('index.js', function() {
     describe('with coverage enabled', function() {
       beforeEach(function() {
         sandbox.stub(Index, '_isCoverageEnabled').returns(true);
-        Index.fileLookup = {
+        sandbox.stub(Index, 'fileLookup').value({
           'some/module.js': 'some/file.js',
           'some/other/module.js': 'some/other/file.js'
-        };
-        Index.parent = {
+        });
+        sandbox.stub(Index, 'parent').value({
           isEmberCLIAddon: function() {
             return false;
           }
-        };
+        });
       });
 
       it('does nothing if type is not test-body-footer', function() {
@@ -84,10 +85,10 @@ describe('index.js', function() {
         post: sinon.spy()
       };
 
-      Index.project = {
+      sandbox.stub(Index, 'project').value({
         root: '/path/to/foo-bar',
         configPath: sinon.stub().returns('tests/dummy/config/environment.js')
-      };
+      });
     });
 
     describe('when coverage is enabled', function() {
@@ -113,13 +114,13 @@ describe('index.js', function() {
     });
   });
 
-  describe('_getIncludes', function() {
+  describe('_getIncludesForDir', function() {
     beforeEach(function() {
       sandbox.stub(Index, 'project').value({ root: 'test/fixtures/my-addon/' });
     });
 
     it('gets files to include from the app directory', function() {
-      Index._getIncludes('test/fixtures/my-addon/app', 'my-app');
+      Index._getIncludesForDir('test/fixtures/my-addon/app', 'my-app');
       expect(Index.fileLookup).to.deep.equal({
         'my-app/utils/my-covered-util.js': 'app/utils/my-covered-util.js',
         'my-app/utils/my-uncovered-util.js': 'app/utils/my-uncovered-util.js'
@@ -127,7 +128,7 @@ describe('index.js', function() {
     });
 
     it('gets files to include from the addon directory', function() {
-      Index._getIncludes('test/fixtures/my-addon/addon', 'my-addon');
+      Index._getIncludesForDir('test/fixtures/my-addon/addon', 'my-addon');
       expect(Index.fileLookup).to.deep.equal({
         'my-addon/utils/my-covered-util.js': 'addon/utils/my-covered-util.js',
         'my-addon/utils/my-uncovered-util.js': 'addon/utils/my-uncovered-util.js'
@@ -137,14 +138,14 @@ describe('index.js', function() {
 
   describe('_getExcludes', function() {
     beforeEach(function() {
-      Index.parent = {
+      sandbox.stub(Index, 'parent').value({
         isEmberCLIAddon: function() {
           return false;
         },
         name: function() {
           return 'test';
         }
-      };
+      });
     });
 
     describe('when excludes not defined in config', function() {
@@ -275,14 +276,14 @@ describe('index.js', function() {
     var isAddon;
 
     beforeEach(function() {
-      Index.parent = {
+      sandbox.stub(Index, 'parent').value({
         name: function() {
           return 'parent-app';
         },
         isEmberCLIAddon: function() {
           return isAddon;
         }
-      };
+      });
     });
 
     describe('when parent is an app', function() {
@@ -311,13 +312,12 @@ describe('index.js', function() {
     var result;
 
     beforeEach(function() {
-      Index.project = {
+      sandbox.stub(Index, 'project').value({
         findAddonByName: sinon.stub().returns({ name: 'my-addon' }),
         pkg: {
           name: '@scope/ember-cli-my-addon'
         }
-      };
-
+      });
       result = Index._findCoveredAddon();
     });
 
@@ -330,7 +330,7 @@ describe('index.js', function() {
     });
   });
 
-  describe('_instrumentDirectory', function() {
+  describe('_getIncludes', function() {
     beforeEach(function() {
       sandbox.stub(Index, 'IstanbulPlugin').value('istanbul');
       sandbox.stub(Index, '_getExcludes').returns([]);
@@ -341,7 +341,7 @@ describe('index.js', function() {
       sandbox.stub(Index, 'app').value({});
     });
 
-    describe('_instrumentAppDirectory', function() {
+    describe('_getIncludesForAppDirectory', function() {
 
       describe('for an app', function() {
         beforeEach(function() {
@@ -351,30 +351,16 @@ describe('index.js', function() {
           });
         });
 
-        it('instruments the app directory', function() {
-          Index._instrumentAppDirectory();
+        it('gets includes for the app directory', function() {
+          const includes = Index._getIncludesForAppDirectory();
+          expect(includes).to.deep.equal([
+            'my-app/utils/my-covered-util.js',
+            'my-app/utils/my-uncovered-util.js'
+          ]);
           expect(Index.fileLookup).to.deep.equal({
             'my-app/utils/my-covered-util.js': 'app/utils/my-covered-util.js',
             'my-app/utils/my-uncovered-util.js': 'app/utils/my-uncovered-util.js'
           });
-          expect(Index.app).to.deep.equal({
-            options: {
-              babel: {
-                plugins: [
-                  [
-                    'istanbul',
-                    {
-                      exclude: [],
-                      include: [
-                        'my-app/utils/my-covered-util.js',
-                        'my-app/utils/my-uncovered-util.js'
-                      ]
-                    }
-                  ]
-                ]
-              }
-            }
-          });
         });
       });
 
@@ -386,46 +372,33 @@ describe('index.js', function() {
           });
         });
 
-        it('instruments the app directory', function() {
-          Index._instrumentAppDirectory();
+        it('gets includes for the app directory', function() {
+          const includes = Index._getIncludesForAppDirectory();
+          expect(includes).to.deep.equal([
+            'dummy/utils/my-covered-util.js',
+            'dummy/utils/my-uncovered-util.js'
+          ]);
           expect(Index.fileLookup).to.deep.equal({
             'dummy/utils/my-covered-util.js': 'app/utils/my-covered-util.js',
             'dummy/utils/my-uncovered-util.js': 'app/utils/my-uncovered-util.js'
           });
-          expect(Index.app).to.deep.equal({
-            options: {
-              babel: {
-                plugins: [
-                  [
-                    'istanbul',
-                    {
-                      exclude: [],
-                      include: [
-                        'dummy/utils/my-covered-util.js',
-                        'dummy/utils/my-uncovered-util.js'
-                      ]
-                    }
-                  ]
-                ]
-              }
-            }
-          });
         });
       });
 
     });
 
-    describe('_instrumentAddonDirectory', function() {
+    describe('_getIncludesForAddonDirectory', function() {
 
       describe('for an app', function() {
         beforeEach(function() {
           sandbox.stub(Index, '_findCoveredAddon').returns(null);
-          sandbox.spy(Index, '_instrumentDirectory');
+          sandbox.spy(Index, '_getIncludesForDir');
         });
 
-        it('does not instrument the addon directory', function() {
-          Index._instrumentAddonDirectory();
-          sinon.assert.notCalled(Index._instrumentDirectory);
+        it('does not get includes for the addon directory', function() {
+          const includes = Index._getIncludesForAddonDirectory();
+          expect(includes).to.be.undefined;
+          sinon.assert.notCalled(Index._getIncludesForDir);
         });
       });
 
@@ -442,55 +415,41 @@ describe('index.js', function() {
           addon = null;
         });
 
-        it('instruments the addon directory', function() {
-          Index._instrumentAddonDirectory();
+        it('gets includes for the addon directory', function() {
+          const includes = Index._getIncludesForAddonDirectory();
+          expect(includes).to.deep.equal([
+            'my-addon/utils/my-covered-util.js',
+            'my-addon/utils/my-uncovered-util.js'
+          ]);
           expect(Index.fileLookup).to.deep.equal({
             'my-addon/utils/my-covered-util.js': 'addon/utils/my-covered-util.js',
             'my-addon/utils/my-uncovered-util.js': 'addon/utils/my-uncovered-util.js'
           });
-          expect(addon).to.deep.equal({
-            name: 'my-addon',
-            options: {
-              babel: {
-                plugins: [
-                  [
-                    'istanbul',
-                    {
-                      exclude: [],
-                      include: [
-                        'my-addon/utils/my-covered-util.js',
-                        'my-addon/utils/my-uncovered-util.js'
-                      ]
-                    }
-                  ]
-                ]
-              }
-            }
-          });
         });
       });
 
     });
 
-    describe('_instrumentInRepoAddonDirectories', function() {
+    describe('_getIncludesForInRepoAddonDirectories', function() {
 
       describe('for an app with no inrepo addons', function() {
         beforeEach(function() {
           sandbox.stub(Index, 'project').value({ pkg: { } });
-          sandbox.spy(Index, '_instrumentDirectory');
+          sandbox.spy(Index, '_getIncludesForDir');
         });
 
         it('does not instrument any inrepo addon directories', function() {
-          Index._instrumentInRepoAddonDirectories();
-          sinon.assert.notCalled(Index._instrumentDirectory);
+          const includes = Index._getIncludesForInRepoAddonDirectories();
+          expect(includes).to.deep.equal([]);
+          sinon.assert.notCalled(Index._getIncludesForDir);
         });
       });
 
       describe('for an app with an inrepo addon', function() {
-        let addon = {};
+        let addon = { name: 'my-in-repo-addon' };
 
         beforeEach(function() {
-          sandbox.stub(path, 'basename').returns('my-inrepo-addon');
+          sandbox.stub(path, 'basename').returns('my-in-repo-addon');
           sandbox.stub(Index, 'project').value({
             pkg: {
               'ember-addon': {
@@ -499,7 +458,7 @@ describe('index.js', function() {
                 ]
               }
             },
-            root: 'test/fixtures/my-addon/',
+            root: 'test/fixtures/my-app-with-in-repo-addon/',
             findAddonByName() { return addon; }
           });
         });
@@ -509,30 +468,18 @@ describe('index.js', function() {
         });
 
         it('instruments the inrepo addon', function() {
-          Index._instrumentInRepoAddonDirectories();
+          const includes = Index._getIncludesForInRepoAddonDirectories();
+          expect(includes).to.deep.equal([
+            'my-app/utils/my-covered-util.js',
+            'my-app/utils/my-uncovered-util.js',
+            'my-in-repo-addon/utils/my-covered-util.js',
+            'my-in-repo-addon/utils/my-uncovered-util.js'
+          ]);
           expect(Index.fileLookup).to.deep.equal({
-            'my-app/utils/my-covered-util.js': 'app/utils/my-covered-util.js',
-            'my-app/utils/my-uncovered-util.js': 'app/utils/my-uncovered-util.js',
-            'my-inrepo-addon/utils/my-covered-util.js': 'addon/utils/my-covered-util.js',
-            'my-inrepo-addon/utils/my-uncovered-util.js': 'addon/utils/my-uncovered-util.js',
-          });
-          expect(addon).to.deep.equal({
-            options: {
-              babel: {
-                plugins: [
-                  [
-                    'istanbul',
-                    {
-                      exclude: [],
-                      include: [
-                        'my-inrepo-addon/utils/my-covered-util.js',
-                        'my-inrepo-addon/utils/my-uncovered-util.js'
-                      ]
-                    }
-                  ]
-                ]
-              }
-            }
+            'my-app/utils/my-covered-util.js': 'lib/my-in-repo-addon/app/utils/my-covered-util.js',
+            'my-app/utils/my-uncovered-util.js': 'lib/my-in-repo-addon/app/utils/my-uncovered-util.js',
+            'my-in-repo-addon/utils/my-covered-util.js': 'lib/my-in-repo-addon/addon/utils/my-covered-util.js',
+            'my-in-repo-addon/utils/my-uncovered-util.js': 'lib/my-in-repo-addon/addon/utils/my-uncovered-util.js',
           });
         });
       });
diff --git a/yarn.lock b/yarn.lock
index 2de85208..a9d49b8f 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -4450,6 +4450,10 @@ lodash.clonedeep@^4.4.1:
   version "4.5.0"
   resolved "https://registry.yarnpkg.com/lodash.clonedeep/-/lodash.clonedeep-4.5.0.tgz#e23f3f9c4f8fbdde872529c1071857a086e5ccef"
 
+lodash.concat@^4.5.0:
+  version "4.5.0"
+  resolved "https://registry.yarnpkg.com/lodash.concat/-/lodash.concat-4.5.0.tgz#b053ae02e4a8008582e7256b9d02bda6d0380395"
+
 lodash.debounce@^3.1.1:
   version "3.1.1"
   resolved "https://registry.yarnpkg.com/lodash.debounce/-/lodash.debounce-3.1.1.tgz#812211c378a94cc29d5aa4e3346cf0bfce3a7df5"