Bundling Auto And Home Insurance: Smart Move Or Not?

Bundling home and auto insurance can be a great way to save money and simplify your insurance management. However, it's not always the best option, as it may depend on your unique circumstances and insurance needs.

Bundling insurance refers to purchasing multiple types of insurance policies from the same provider. By doing so, you may be eligible for a multi-policy or bundling discount, which can lead to significant savings on your premiums. Additionally, bundling can make it easier to manage your insurance, as you'll only have to deal with one insurer, app, or website for all your policies.

However, there are also some potential drawbacks to consider. For instance, you might not find an insurer that offers all the coverage and discounts you're looking for, or you may find that separate policies with different insurers result in even greater savings.

To decide if bundling is right for you, it's important to shop around and compare quotes for both bundled and separate policies. Consider your specific insurance needs, evaluate the coverage and discounts offered, and calculate the total cost with and without bundling to determine which option provides the best value.

Potential savings

Bundling home and auto insurance can lead to significant savings on both policies. The exact amount varies depending on the insurance company and the customer's location, but typical bundling discounts hover around 20%. For example, State Farm offers an annual bundling discount of up to $1,273, while Allstate offers a bundling discount of up to 25%. Progressive says new customers can save more than 20% on average by bundling home and auto insurance, and Amica advertises discounts of up to 20% when you combine homeowners insurance with policies for auto insurance, and up to 30% for combining home with auto, condo, life, or umbrella policies.

Streamlined account management

Fewer Accounts to Manage

Firstly, having multiple policies with one provider means you only have to manage one account, instead of several. This makes it easier to stay on top of your insurance payments and reduces the risk of missing a payment, which could cause your coverage to lapse.

One App, One Login

With all your insurance policies in one place, you only need to download and familiarise yourself with one app. This saves time and mental energy, as you don't have to navigate multiple apps with different interfaces.

One Point of Contact

When you need to make a claim, having one insurance provider means you only have to contact one company and deal with one agent. This saves time and streamlines the claims process, especially if the incident involves both your car and home, as you won't have to coordinate between multiple providers.

Consolidated Billing

Bundling insurance policies also means you'll receive one bill, which is easier to manage and helps you keep track of expenses. With just one payment to make, you're also less likely to accidentally miss a payment.

Automatic Payments

With just one insurance provider, you can set up automatic payments more easily. This saves you time and reduces the risk of missed payments. Some insurance companies even offer additional discounts for customers who set up autopay.

Easier to Keep Track of Coverage

Having all your insurance policies in one place makes it easier to keep track of your coverage. This is especially beneficial if you have multiple insurance needs, as you can view and manage all your policies through a single interface.

Easier to Compare Coverage Options

When you're looking to adjust your coverage, having everything in one place makes it simpler to compare options and ensure you're getting the best deal. It also makes it easier to see if you're eligible for any additional discounts, such as those offered for bundling multiple policies.

In summary, bundling home and auto insurance simplifies account management by reducing the number of accounts, apps, and points of contact you have to deal with. This saves time, reduces the risk of errors, and makes it easier to keep track of your coverage and expenses.

Single deductible

One of the benefits of bundling your home and auto insurance is that you could save on deductibles. Sometimes, a single event, like a tree branch falling on your roof and then your car, can damage both your home and your car. If you have bundled insurance, some companies will charge you only one deductible for such events. If you have separate insurers for home and auto insurance, you will have to pay two separate deductibles.

Limited coverage and discount options

While bundling your home and auto insurance can often lead to significant savings, there are some limitations to the coverage and discount options available.

Limited Coverage Options

If you have specialized insurance needs, you may struggle to find a single insurer that offers the combination of home and auto coverage you want. For example, if you have a record of unsafe driving, your best bet for car insurance might be a company that specializes in high-risk drivers and doesn't offer home insurance. Similarly, homeowners in wildfire zones may need to turn to state insurance pools or surplus line insurance carriers that don't sell car insurance.

Limited Discount Options

Bundling isn't the only way to earn insurance discounts. You might be able to get cheaper car insurance rates for getting good grades, taking a defensive driving course, or having an alternative-fuel vehicle. Home insurance carriers might give discounts for retirees or for installing devices such as burglar alarms.

Additionally, switching to a different insurance provider will cost you any existing loyalty discounts. Depending on the discounts you qualify for, you might pay less by purchasing home and auto insurance from different companies.

May not result in the lowest rates

Bundling home and auto insurance can save you money, but it may not always result in the lowest rates. Here are some reasons why:

• Inadequate comparison: It is important to compare quotes from different insurers to find the best rates. Some insurers may offer lower base premiums, even without a bundling discount, resulting in overall lower costs compared to a bundled policy with a higher base premium.
• Specialized insurance needs: If you have specialized insurance needs, such as a record of unsafe driving or living in a wildfire zone, you may need to consider insurers that specialize in high-risk coverage or specific types of coverage. These specialized insurers may not offer bundling options.
• Limited coverage and discount options: Bundling home and auto insurance may limit your coverage and discount options. It may be challenging to find a carrier that offers all the desired endorsements and discounts for both home and auto insurance.
• Third-party policies: Some insurers may partner with third-party companies to offer "bundled" policies. While this may still result in savings, it defeats the convenience of managing policies in one place, which is one of the key benefits of bundling.
• Discouraging price shopping: Bundling policies may discourage you from regularly shopping around for better rates. The convenience of having multiple policies with one insurer may make you less likely to compare prices with other insurers, potentially leading to higher premiums over time.

Frequently asked questions