Bundling Home And Auto Insurance: How Much Can You Save?

Bundling home and auto insurance is a great way to save money, with some insurers advertising discounts of up to 30%. However, it is not always the case that bundling will be the cheapest option. It is important to shop around and compare quotes for bundled and unbundled policies to ensure you are getting the best deal.

Bundling your insurance can also make your policy much easier to manage, as you will only have to deal with one insurer. This means you will only have one bill to pay each billing cycle and will only have to communicate with one company in the event of a claim.

Bundling can also reduce your risk of being dropped by your insurer. If you have multiple policies with one provider, they may be less likely to drop you as a customer if you make several claims in a year.

However, bundling can also have its downsides. It can encourage a set it and forget it mentality, making it less likely that you will shop around and compare prices with other insurers. It can also be more difficult to leave your insurer if you are unhappy with their service, as you will have to switch both your home and auto policies to a new provider.

In addition to home and auto insurance, there are several other types of insurance that can be bundled together, including:

- Umbrella insurance

- Life insurance

- Renters insurance

- Boat insurance

- Motorcycle insurance

- RV insurance

How much can you save by bundling home and auto insurance?

Bundling home and auto insurance can be a great way to save money. Most insurance companies offer discounts when you purchase more than one type of policy from them. The amount you can save depends on the insurance company and your location, but it can be anywhere from 5% to 30% of your total insurance cost. For example, State Farm offers a bundling discount of up to $1,273 per year, while Allstate offers a discount of up to 25%.

Bundling your home and auto insurance can also make managing your policies easier. You'll only have to deal with one insurance company, and you might be able to combine your bills and pay them together.

However, bundling isn't always the cheapest option. In some cases, you might find that purchasing separate policies from different insurance providers will save you more money. It's important to shop around and compare quotes for bundled and unbundled policies before deciding.

What are the benefits of bundling home and auto insurance?

There are several benefits to bundling home and auto insurance. Firstly, it can lower your premiums. Most insurance companies offer discounts for purchasing multiple insurance policies, which can result in significant savings. For example, Progressive claims that new customers can save more than 20% on average by bundling home and auto insurance, while State Farm cites average savings of $1,073 annually. This can free up money to put towards other financial goals, such as an emergency fund, retirement, or a vacation.

Secondly, bundling simplifies account management. Having one insurance company for both homeowners and car insurance streamlines the process, meaning you're less likely to miss a payment. You can set up just one account, download one company's mobile app, and schedule automatic bill payments in one place. This is especially beneficial if you have a claim involving both your car and your home, as you'll only have to deal with a single insurance carrier and agent.

Thirdly, you could save on deductibles. If a covered event damages both your home and your car, some insurance companies will only charge you one deductible for such events. With policies from separate insurers, you would have to pay two separate deductibles.

What are the drawbacks of bundling home and auto insurance?

Bundling home and auto insurance is not always the best option, despite the potential savings and convenience. Here are some of the drawbacks of bundling these policies:

Limited Coverage and Discount Options

You may struggle to find a single carrier that offers all the home and auto endorsements you require. If you are seeking specialised discounts, such as a telematics program, these may also be difficult to find across policies with the same company.

Products May Be Sold by Third Parties

A car insurance company may have a partner company that sells home insurance and advertise it as a "bundled" policy. While this can still generate savings, holding separate policies with different insurers means you won't be able to manage your policies in one place.

May Not Result in the Lowest Rates

Bundling your policies with your current insurer may not guarantee the best rates available. Additionally, having bundled policies may discourage you from shopping around for better deals.

Separate Policies Might Be Cheaper

Although bundling home and auto insurance usually reduces your premiums, it doesn't always deliver the biggest savings. The discounts offered can vary depending on your location, the insurance carrier, and other factors.

May Not Find the Plan You Need

If you have specialised insurance needs, there may not be a single insurer that offers the combination of home and auto coverage that you want. For example, if you have a record of unsafe driving, your best option for car insurance might be a company that specialises in high-risk drivers and doesn't offer home insurance.

May Keep You From Shopping Around

Once you have multiple policies with the same insurer, you may be less inclined to shop around for better rates. This may result in gradually rising premiums over time.

What other types of insurance can be bundled with home and auto insurance?

There are several types of insurance that can be bundled with home and auto insurance. These include:

• Renters insurance
• Condo insurance
• Life insurance
• Motorcycle insurance
• Boat insurance
• Umbrella insurance
• RV insurance
• Vacation home insurance

Bundling these types of insurance with home and auto insurance can often result in significant savings, as most insurance companies offer discounts for purchasing multiple policies. Additionally, bundling can simplify account management and make it easier to keep track of payments. However, it's important to note that bundling may not always be the most cost-effective option, and it's recommended to shop around and compare quotes from different insurance providers to find the best deal.

How do you bundle home and auto insurance?

Bundling home and auto insurance is a great way to save money and streamline your insurance management. Here are the steps to bundle your home and auto insurance:

Step 1: Understand Insurance Bundling

Insurance bundling refers to purchasing multiple insurance policies from a single insurance company. The most common type of insurance bundle is home and auto insurance. However, insurance companies may offer various policy combinations for bundling, such as auto and renters insurance or auto and life insurance.

Step 2: Research Insurance Companies and Quotes

Start by researching reputable insurance companies that offer bundling options. Visit their websites, compare their bundling packages, and use their estimation tools to get initial cost estimates. Remember to consider your specific insurance needs and the types of coverage you require. It is essential to compare quotes from multiple insurers to ensure you get the best deal.

Step 3: Contact Insurance Agents

Once you have a list of potential insurance companies, reach out to their agents to get detailed quotes. Discuss your specific insurance needs, including any changes or updates you want in your policies. Ask about the potential discounts and savings offered by bundling. For instance, some companies may offer a discount if you insure multiple vehicles or combine additional policies like boat or life insurance.

Step 4: Evaluate Quotes and Choose an Insurer

After gathering quotes, carefully evaluate the offers. Consider not just the price but also the quality of the insurance company and the coverage provided. Choose an insurer that offers competitive rates, solid reputation, excellent customer service, and the specific coverage you need.

Step 5: Purchase the Bundle

Once you've decided on an insurer, it's time to purchase your bundled policy. Work with the insurance agent to finalise the details and sign the necessary paperwork. Ensure you understand the terms and conditions of your new bundled policy.

Step 6: Manage Your Policies

Now that you have a bundled policy, take advantage of the convenience it offers. Set up your online account to manage your policies in one place. You can also download the insurer's mobile app, if available, to access your policies, view and download documents, pay bills, and file and track claims.

Bundling home and auto insurance can offer significant savings and simplify your insurance management. By following these steps, you can effectively bundle your policies and enjoy the benefits of convenience and cost savings.

Frequently asked questions