Bundling Auto And Home Insurance: Big Savings, One Policy

Bundling home and auto insurance can save you money and make managing your insurance policies easier. However, it's not always the best option.

Bundling insurance means buying different types of insurance policies from the same company. This is a popular option for those who own both a car and a home since bundling homeowners and auto insurance can result in significant savings.

Most insurance companies offer discounts for purchasing multiple insurance policies, also known as a multi-policy or multi-line discount. For example, Progressive says new customers can save more than 20% on average by bundling home and auto insurance. State Farm cites average savings of $1,073 annually.

However, bundling doesn't always deliver the biggest savings. The discounts for bundling home and auto insurance can vary widely depending on your location, the insurance carrier, and other factors. For instance, Allstate reports that the average customer saves 25% by bundling, but says its customers in California save just 2% on average.

It's important to shop around and compare quotes from different insurance companies to find the best deal.

How much can you save by bundling?

Bundling your home and auto insurance can result in significant savings. However, the amount you save depends on several factors, including your location, insurance provider, and the type of coverage you choose.

On average, bundling home and auto insurance can save you between 5% and 25% on your insurance premiums. Some insurance companies offer even higher discounts of up to 30%. For example, Allstate offers savings of up to 25% when you bundle home and auto insurance, while Amica offers discounts of up to 20% when you combine homeowners insurance with auto insurance.

It's important to note that bundling doesn't always result in the cheapest option. In some cases, you may find lower rates by purchasing your home and auto insurance from different providers. Additionally, the availability of bundling discounts and the amount of savings can vary depending on your state and the insurance company you choose.

To get an accurate estimate of how much you can save by bundling, it's recommended to get quotes from multiple insurance companies and compare the costs of bundled and separate policies.

Pros and cons of bundling

Pros of bundling insurance

The primary reason to bundle insurance is to save money. Getting coverage for multiple policies with the same insurer almost always garners a discount. Multi-policy discounts average between 15% and 20%. If your annual total expenditure for insurance is $5,000, an 18% reduction means $900 in savings.

There’s also the convenience of dealing with just one insurer when you bundle insurance. You have a single company to deal with whether you’re making a payment, using online services or asking questions. You can set up just one account, download one company's mobile app and schedule automatic bill payments in one place.

Cons of bundling insurance

Over time, insurers tend to raise premiums, which diminishes the value of the discount initially offered. Unless you comparison shop every year, you could end up paying more than you need to.

Another factor to consider is that some insurers start with a higher premium when offering a discount. The premium you end up with may not result in true savings.

Bundling might not be the right choice if it prevents you from shopping around, which means you could end up paying more.

How to bundle

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

• Research insurance companies: Select several promising insurance companies that offer bundling options and contact them to request quotes. Compare the quotes to determine which company offers the best coverage and price for your needs.
• Review your existing policies: If you already have home or auto insurance, check the terms of your policy. Some insurers may require a notice period before you can cancel your policy, and early termination fees may apply.
• Start the new policies and cancel the existing insurance: Contact your chosen insurer and purchase the bundle. Note that some insurers require all policies in the bundle to start on the same date, so ensure there is no lapse in coverage by coordinating the end date of your current policy with the start date of the new one.
• Enjoy the benefits of bundling: With your new bundle in place, you'll be able to manage your policies through a single app or website, streamline your premium payments, and potentially save a significant amount of money on your insurance costs.

It's important to remember that bundling may not always be the best option for everyone. It's recommended to shop around and compare quotes for both bundled and separate policies to find the most suitable option for your specific needs and circumstances.

When to bundle

Cost Savings

One of the primary motivations for bundling home and auto insurance is the potential for cost savings. Most insurance companies offer discounts when you purchase multiple policies from them. These multi-policy or multi-line discounts can lead to significant savings. However, it's important to compare the costs of bundling versus separate policies, as it doesn't always result in the lowest rates. Get quotes for both options and calculate the total cost, including any applicable discounts, to determine which approach is more cost-effective.

Life Events and Convenience

Life events, such as getting married, moving to a new home, or buying a new vehicle, can be ideal times to consider bundling your insurance. These events often trigger changes in your insurance needs, so it's a natural time to explore bundling options. Additionally, bundling can simplify your insurance management by providing a single point of contact, app, or website for all your policies. This convenience can save you time and reduce the chances of missing payments or overlooking necessary updates.

Policy Requirements and Gaps

If you have specialised insurance needs, bundling may not always be feasible. For instance, if you have a record of unsafe driving, you might need a high-risk driver insurer that doesn't offer home insurance. Similarly, homeowners in high-risk areas, such as wildfire zones, may need to turn to state insurance pools or surplus line carriers that don't provide car insurance. In these cases, bundling may not be an option.

Additionally, consider any potential coverage gaps when deciding whether to bundle. Life can get busy, and certain changes, like getting married, might require updates to your policies. Having one agent for all your bundled policies can help ensure that you have the necessary coverage and that your policies are reviewed and adjusted as your life circumstances change.

Shopping Around

Even if you're happy with your current insurance provider, it's beneficial to shop around periodically. Insurance rates can vary over time, and you might find that another company offers better rates or discounts for bundling. By regularly comparing quotes from multiple insurers, you can make an informed decision about whether to switch providers or bundle your policies.

In summary, when deciding when to bundle your home and auto insurance, consider your unique circumstances, potential cost savings, life events, policy requirements, and the convenience of managing your insurance. Remember to shop around and compare quotes to ensure you're getting the best value and coverage for your needs.

Companies that offer bundling

There are several companies that offer bundling of auto and homeowners insurance. Here are some of the top companies:

USAA

USAA is the top-ranking insurer for home and auto insurance bundles, offering a 10% bundling discount. It is also the No. 1 pick for both homeowners insurance and car insurance. USAA caters to members of the military, veterans, and their families. It is the cheapest among the top-ranking car insurers and ranks first for customer service, claims handling, and discounts for car insurance.

Auto-Owners

Auto-Owners ranks first for homeowners insurance companies for customer service, second for homeowners claims handling, and ties for third place for homeowners policy value. It also has competitive rates for both homeowners and car insurance. Auto-Owners doesn't publicize its bundling discount savings and is not available in 25 states or Washington, D.C.

Nationwide

Nationwide offers a bundling discount of up to 20%. Its auto policy rates are the fourth least expensive, and its average car insurance rate is just $1,621 per year. It also ties for third place when it comes to its home insurance policy claims handling, customer service, customer loyalty, and likelihood to be recommended and renewed for car insurance policies. However, Nationwide's home policy rates are on the more expensive side.

Allstate

Allstate offers a bundling discount of up to 25%. It has competitive rates for both homeowners and car insurance and has a wide selection of home policy discounts. It also ranks second and third on our rankings for top home insurance companies for customer service and claims handling, respectively. However, Allstate ranks poorly for auto policy customer service and claims handling and has the most expensive car insurance policies among the top-ranking companies.

State Farm

State Farm offers an average annual savings of up to $1,273 per year for bundling. It is the largest property and casualty insurer by market share and has generally high scores for customer and claims satisfaction. It also has a wide range of coverage options, including coverage for boats, RVs, farms, and small businesses. However, State Farm does not offer gap insurance on auto policies.

American Family

American Family offers a bundling discount of up to 23%. It provides strong customer service, drawing fewer consumer complaints than expected for an insurer of its size. It also offers a Diminishing Deductibles feature, which reduces your deductibles by $100 for each year you go without filing a claim. However, American Family is not available in all states.

Erie

Erie offers a bundling discount of up to 18%, making it the cheapest of any company on this list. It stands out for its 20 home and auto coverage endorsements, high financial strength rating, and strong claims and customer satisfaction scores. However, Erie is only available in 12 states and Washington, D.C.

Farmers

Farmers offers a bundling discount of up to 18% and has dozens of insurance discounts available. It also has stellar customer complaint scores, receiving 50% fewer customer complaints than its competitors, according to the National Association of Insurance Commissioners. However, Farmers does not offer gap insurance for auto customers, and its financial strength ratings are lower than other companies on this list.

Frequently asked questions