What does bundling auto and home insurance mean?
Bundling home and auto insurance means you buy both policies from one insurer. The same insurance company covers both your car and your home. Insurance companies may also offer bundled discounts for purchasing other types of insurance, such as condo, renters, motorcycle, RV, life, etc. A bundle discount is also known as a multi-policy discount.
When you bundle home and auto, you still have two separate policies, but both policies can be under one account. Insurers will often charge you a single premium with the same coverage renewal and effective dates.
When shopping for a bundled home and auto policy, the biggest discount does not automatically mean you receive the best price on either policy. The best price on a self-contained auto or home insurance policy can save you more money than a bundled discount. The best way to find out is to compare quotes from different companies.
What are the benefits of bundling your home and auto insurance?
On average, you can save 15% annually, or almost $600, by bundling your auto and home insurance policies. But the discounts can reach 28%, depending on the insurer. How much you save depends on various factors such as where you live, insurance company, claims history, etc.
In addition to saving money, bundling provides greater convenience. Instead of having to deal with different companies, invoices and statements, consolidation helps consolidate and streamline your policies. Consolidation allows you to save time and manage your policies through an online portal or insurance agent. You’ll have one bill instead of two, and you’ll be able to access your policy information in one place. Another benefit is that the more policies you bundle, the less likely an insurer is to drop you after submitting claims.
Some companies even offer other benefits, such as a single loss deductible. This means that if your car and your home are damaged at the same time, you don’t have to pay two separate deductibles. The reason insurance companies offer bundling discounts is to encourage you to buy all your insurance policies from them. Customers who consolidate are also more likely to stay with the insurance company and renew their policies.
Should you combine your auto and home insurance?
There are pros and cons to bundling your home and auto insurance. This can be a great way to save money depending on the cost and type of policy you have. However, you may find that other insurance companies offer lower premiums on auto or home insurance policy. The price difference may be cheaper than the bundled discounts you get.
For example, suppose you insure your car with State Farm (which costs $1,397) and your house with Progressive (which costs $1,670). The total premium is $3,067. Let’s say you then decide to bundle the two policies with Nationwide. The total cost to bundle with them is $3,160, which is about $100 more than keeping your policies separate. Additionally, there are many regional companies that offer lower prices if you live in a particular region or belong to a certain organization. Each insurer has its own specialty when it comes to coverage, so you may decide not to group together.
It is important to compare the cost of bundled premiums from different companies, as well as individual quotes. Premiums for bundling aren’t always lower, and not all insurance companies and types of coverage offered are created equal. Some may offer greater coverage, excellent customer service, or better benefits. You should also compare quotes from different companies each year. Quotes offered by insurance companies can change drastically, especially if you add another car, a teenage driver, or need additional coverage. The best company today may not be the best company in the future.