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