In this paper, in order to investigate the fading reduction effect of narrowband and broadband signals in an indoor multipath propagation environment, both the received narrowband signal while a vehicle unit in motion and the frequency sweeped broadband signal received by vertical polarized antenna, horizontal polarized antenna and circularly polarized antenna are analyzed. Specifically, in order to evaluate polarization diversity effect, we examined the difference of fading reduction effect between the polarization diversity reception and the space diversity reception. Using the correlation coefficient and correlation graph for the polarization diversity branches, the diversity effect is evaluated. And also, using the cumulative distribution for the received signal strength simulated by diversity reception, the diversity effect is also estimated. From the evaluation results it was found that the polarization diversity which use a circularly polarized antenna at the transmitting end and the vertical and horizontal polarized antenna branches at the receiving end is markedly excellent.