Bundling Home And Auto Insurance: Smart Move?

Bundling home and auto insurance can be a great way to save money and simplify your policy management. Most insurance companies provide bundling discounts when policyholders purchase more than one policy type with the same carrier. The discount is typically one of the largest offered by insurance companies, so you may see significant savings.

While the policies are “bundled” with the same carrier, they generally aren’t actually covered on the same policy and will usually have different policy numbers. Bundling your insurance simplifies your record-keeping and streamlines your bill payments since you’ll only have to deal with one insurance provider for both home and car coverage. Plus, it may qualify you for discounts on your insurance premiums.

Pros of bundling home and auto insurance

There are several advantages to bundling home and auto insurance. Here are some pros of bundling:

Lower Premiums

Bundling home and auto insurance can lead to significant savings on insurance premiums. Most insurance companies offer bundling discounts, which can be as high as 20-30% off the total cost of insurance. This discount can apply to both the home and auto insurance policies, resulting in lower premiums for both.

Simplified Policy Management

Bundling insurance policies can simplify the management of multiple policies. Having all policies with the same company means dealing with a single app or website, making it easier to manage and access policy information. It also means communicating and working with a single insurance agent, which can be more convenient and efficient.

Streamlined Billing

With bundling, you will likely receive a combined bill for both home and auto insurance, making it easier to keep track of payments. This streamlined billing process reduces the chances of missing a payment and helps you stay organized.

Single Deductible

In some cases, bundling home and auto insurance can lead to a single deductible for claims involving both your home and vehicle. For example, if a storm damages both your home and car, you will only need to pay one deductible instead of two separate ones. This can provide significant financial relief during challenging times.

Convenience and Accessibility

Bundling insurance policies can offer the convenience of having all your insurance needs met by a single company. This can make it easier to add or remove coverage options, make changes to your policies, or seek support when needed. Additionally, having a single point of contact for all your insurance needs can save time and effort.

While bundling home and auto insurance has several advantages, it is important to note that it may not always be the cheapest option. It is essential to shop around, compare quotes, and consider your specific needs and circumstances before making a decision.

Cons of bundling home and auto insurance

While bundling home and auto insurance can be a great way to save money, it is not always the best option. Here are some cons of bundling home and auto insurance:

• Discourages price shopping: Bundling can be so convenient that it may discourage you from shopping around for the best prices. You may not realize that you are overpaying because you are unaware of what other companies charge. It is important to compare quotes from multiple insurers and choose the combination that saves you the most money.
• Not always cheaper: Bundling may not always result in the lowest rates. Your current insurer might allow you to bundle policies, but that doesn't guarantee the best rates. Separate policies with different insurers might be cheaper, even without a bundling discount. It is essential to compare the costs of bundling versus purchasing separate policies.
• Limited coverage and discount options: It can be challenging to find a carrier that offers all the desired home and auto endorsements. Specialized discounts, such as a telematics program, may also be difficult to find across policies with the same company.
• Sold by third parties: Some "bundled" policies are not truly bundled. Auto insurers may partner with another company to provide home insurance, resulting in dealing with multiple insurers despite bundling. This arrangement may also prevent you from managing your bills in one place.
• Availability: Not all insurers offer both home and auto policies, so bundling may not be an option with your preferred provider. Additionally, bundling options and discounts may vary depending on your location.
• Inconvenience when switching: Bundling can lead to a "set it and forget it" mentality, making it less likely that you will check competitors' rates. Prices tend to increase over time, and you may end up paying more than necessary if you don't shop around occasionally.

How to bundle home and auto insurance

Bundling home and auto insurance can save you time and money. It is when you have your auto and home insured with the same company, and it can apply to more than just auto and home products.

Benefits of bundling home and auto insurance:

• Discounts on premiums: Insurance companies often offer discounts when you bundle multiple policies. The more policies you bundle, the more you can save.
• Streamlined payments and policy management: Dealing with one insurance provider for multiple policies simplifies your record-keeping and streamlines your bill payments.
• Convenience: You can manage all your policies in one place, often through a single app, and you won't need to call an agent or go to an office.
• Security: Sticking with one insurance provider makes it less likely that you'll be dropped as a customer when you need to file claims against your policy.
• Compare quotes: Get quotes from several different insurers to find the best rates and coverage options for your needs. Use estimation tools on insurance company websites or contact their agents to get personalized quotes.
• Consider your needs: Think about all your insurance needs and any changes or updates you want to make to your policies. Not all insurers may offer all the coverage you require, so focus your search on companies that do.
• Choose quality: Select a reputable company with solid customer service and the specific coverage options you need.

Tips for maximizing savings:

• Shop around: Don't just settle for your current insurance provider. Explore the market to find the best deal.
• Compare coverage: Don't focus solely on price. Ensure the insurance bundle you choose contains the coverage you need, including any add-ons or endorsements.
• Check for third parties: Ask if the insurer uses a partner company for either policy you want to bundle. This may reduce the convenience of managing your insurance.

Things to keep in mind:

• Bundling isn't always cheaper: Compare quotes for separate home and auto policies with quotes for bundled policies. In some cases, especially if you have traffic violations or poor credit, it may be more affordable to choose separate policies.
• Regularly shop for quotes: Insurance rates can change over time, so it's important to compare quotes regularly, especially after major life changes or significant rate increases.

By following these steps, you can effectively bundle your home and auto insurance, potentially saving hundreds of dollars per year.

Discounts when bundling home and auto insurance

Bundling home and auto insurance can lead to significant savings, with some insurers offering discounts of up to 35%. However, it's important to note that bundling doesn't always result in cheaper rates, and it's essential to compare quotes from multiple providers to find the best deal. Here are some factors to consider when looking for discounts when bundling home and auto insurance:

• Discount Percentage: The discount offered for bundling policies can vary between insurers. Typical bundling discounts hover around 20%, but some companies offer higher discounts. For example, Allstate offers a bundling discount of up to 25%, while Farmers offers an average discount of 20%.
• Convenience and Streamlined Billing: Bundling home and auto insurance can provide the convenience of managing multiple policies in one place, often through a single app or website. It can also streamline billing by combining bills into one payment for both policies.
• Single Deductible: Some insurers offer a single deductible for claims involving both your home and vehicle. For instance, if your home and car are damaged in the same covered event, you may only need to pay one deductible instead of two.
• Additional Discounts: In addition to the bundling discount, look for insurers that offer a range of other discounts. For example, you may be eligible for discounts if you have safety features in your home or vehicle, a good driving record, or if you've been claims-free for a certain period.
• Customer Satisfaction and Financial Strength: Consider choosing an insurer with strong customer satisfaction ratings and financial stability. This can give you peace of mind and ensure a smoother claims process.
• Coverage Options: Ensure that the insurer provides the coverage options you need for both home and auto insurance. Some companies offer a wide range of coverage add-ons and endorsements, while others may have more limited options.
• Price Comparison: Don't just focus on the discount percentage; compare the total cost of the bundled policies, including the base premium and any additional discounts you may qualify for. Get quotes from multiple insurers and do the math to find the combination that offers the best value.
• Independent Agents: Consider working with an independent insurance agent who can provide quotes from multiple companies, helping you find the best rate and coverage for your needs.
• Third-Party Policies: Be aware that some insurers may use affiliate companies to provide home or auto insurance as part of a bundle. While this can still result in savings, it may reduce the convenience of managing your policies with a single insurer.

Companies that offer bundling home and auto insurance

Bundling home and auto insurance can be a great way to save money, and many companies offer this option. Here are some of the top companies that provide bundling for home and auto insurance:

State Farm

State Farm is one of the largest insurance companies in the US and offers a bundling discount of up to $1,273 per year. They have a wide range of coverage options and are known for their excellent customer service. State Farm is available in most states, except Massachusetts and Rhode Island.

American Family

American Family offers a bundling discount of up to 23% and has strong customer service. They provide a variety of coverage options, including Diminishing Deductibles for both home and auto insurance. American Family is available in 19 states.

Allstate

Allstate provides a bundling discount of up to 25% and has a wide range of coverage options for both home and auto insurance. They have local agents available and offer additional coverage options such as home-sharing coverage and green improvement reimbursement. Allstate is available in all 50 states and Washington, D.C.

USAA

USAA is a great option for military members and their families, offering a bundling discount of up to 10%. They have competitive rates and high customer satisfaction ratings. USAA also offers unique benefits for military personnel, such as no deductible for uniforms damaged or stolen while on active duty.

Nationwide

Nationwide offers a bundling discount of up to 20% and has local independent agents to provide personalized service. They have a variety of coverage options, including credit card coverage and ordinance coverage. Nationwide is available in most states, except Alaska, Florida, and Hawaii, among others.

Auto-Owners

Auto-Owners Insurance offers a bundling discount and has competitive rates, excellent customer satisfaction ratings, and a wide range of coverage options. They provide unique coverage options, such as identity theft coverage and water backup coverage. Auto-Owners is available in about half of the US states.

Erie Insurance

Erie Insurance offers very competitive bundling rates and has high customer satisfaction ratings. They provide guaranteed replacement cost coverage for your home and auto insurance and have a rate lock feature to avoid premium rate hikes. Erie Insurance is available in 12 states.

Travelers

Travelers Insurance offers a bundling discount and has a superior financial strength rating. They provide coverage options for eco-friendly homes and offer discounts for homes that meet certain efficiency standards. Travelers is available in most states.

Farmers

Farmers Insurance offers a bundling discount of around 20% and has numerous additional discounts for both home and auto insurance. They have local agents and provide coverage options such as identity protection plans and water backup coverage. Farmers is available in most states.

Frequently asked questions