Bundling Home And Auto Insurance: Worth It?

Is it better to bundle home and auto insurance?

Bundling home and auto insurance is a common way to save money on your premium. It's also a great way to simplify your insurance payments and management. However, it's not always the best option, as it may depend on your specific circumstances and insurance needs.

Benefits of bundling home and auto insurance:

- Potential savings on premiums: Most insurance companies offer discounts, often referred to as multi-policy or multi-line discounts, when you purchase multiple policies from them. These discounts can lead to significant savings on your insurance premiums.

- Streamlined account and payment management: Having one insurance company for both your home and auto insurance means you only need to manage one account, use one mobile app, and keep track of one payment due date. This simplifies your insurance administration and reduces the risk of missing a payment.

- Potential savings on deductibles: In some cases, if a covered event damages both your home and car, bundling your insurance may result in paying only one deductible instead of two separate ones to different insurers.

Drawbacks of bundling home and auto insurance:

- Limited plan options: If you have specialised insurance needs, you may not find a single insurer that offers the combination of home and auto coverage you require. For example, if you have a record of unsafe driving, your best option for car insurance may be a company specialising in high-risk drivers, which might not offer home insurance.

- Separate policies might be cheaper: Although bundling typically reduces premiums, it doesn't always result in the biggest savings. The discounts can vary depending on location, the insurance carrier, and other factors. It's important to compare quotes and consider all available discounts to determine the most cost-effective option.

- May discourage shopping around: Once you have multiple policies with the same insurer, you might be less inclined to shop around for better rates. This could lead to gradually increasing premiums over time.

In conclusion, while bundling home and auto insurance can offer benefits such as potential savings and simplified management, it's important to carefully consider your specific needs and compare quotes from multiple insurers before making a decision.

Pros of bundling insurance

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

Lower Premiums

Bundling insurance can lead to significant savings on both home and auto insurance policies. Most insurance companies offer multi-policy discounts, which can range from 5% to 30% of the total cost. The exact amount depends on the company and your location.

Simplified Policy Management

Having all your policies in one place makes it easier to manage. You'll use one app or website to manage your car and home policies, and they will be linked to the same account. This simplifies the insurance management process and reduces the hassle of dealing with multiple agents and customer service representatives.

Insurance Security

Having multiple policies with the same company can make it less likely that the insurer will drop you if you have to make auto insurance claims or receive tickets. Bundling can provide a level of security and stability, especially if you have a history of incidents that may impact your insurance rates.

Single Deductible for Certain Events

In some cases, if a single event damages both your home and vehicle, such as a storm or fire, you may only need to pay one deductible instead of two. This benefit can provide significant financial relief and streamline the claims process by dealing with a single insurance company.

Convenience and Accessibility

Bundling insurance can offer the convenience of keeping your policies in one place. You'll have a single point of contact for any queries or issues, and some companies provide access to a dedicated agent. Additionally, you may be able to combine billing for your home and auto insurance, receiving just one bill for both policies each billing cycle.

Cons of bundling insurance

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

• Not always the cheapest option: While bundling can often result in significant savings, it is not always the cheapest option. In some cases, you may be able to find lower rates by purchasing separate policies from different providers. It's important to compare quotes and do the math to ensure that bundling is the most cost-effective option.
• Limited coverage and discount options: It may be challenging to find a single carrier that offers all the home and auto endorsements you're looking for. If you're seeking specialized discounts or coverage options, you might find that bundling limits your choices.
• Products sold by third parties: In some cases, a car insurance company may partner with another company to sell home insurance and market it as a "bundled" policy. While this can still result in savings, it means you'll have to manage your policies with separate insurers, reducing the convenience of bundling.
• Discourages price shopping: The convenience of bundling may discourage you from regularly shopping around for better rates. It's important to periodically compare quotes from other providers to ensure you're getting the best deal.
• May not include all desired policies: If you're looking to bundle multiple types of insurance, such as home, auto, and life insurance, you may find that some insurers do not offer all the policies you need. This could result in managing policies with multiple companies, reducing the convenience of bundling.
• Potential for reduced coverage: When bundling, it's important to verify that your coverage options and limits remain the same or improve. In some cases, you may find that bundling results in reduced coverage or limitations on certain types of claims.

How to bundle insurance

Bundling insurance refers to the process of purchasing multiple types of insurance policies from a single insurance company. The most common combination is home and auto insurance, but other policies such as life insurance, renters insurance, condo insurance, or insurance for motorcycles and boats can also be bundled.

• Evaluate your needs: Before requesting quotes, determine what you're looking for in an insurance provider. This could include specific policy features, digital tools, or financial strength ratings.
• Get quotes: Contact insurance companies or independent agents, or use online tools to request quotes for the policies you want to bundle. Make sure to get quotes for the same coverage types and amounts to facilitate comparison.
• Review the quotes: Pay attention to the premium price, the bundling discount offered, and any additional perks or special features included.
• Choose a company: Select the insurer that best suits your coverage needs and fits your budget.
• Purchase the new policies: Submit an application and pay the premiums to activate your new policies.
• Cancel your existing policies: Ensure your new coverage is active and you have proof of insurance before cancelling your old policies. Contacting the insurance company directly is usually the fastest way to cancel.
• Receive any refund: When you cancel your old policies, you may be entitled to a prorated refund of your premiums, minus any applicable cancellation fees.

Additionally, here are some tips to maximize your savings when bundling insurance:

• Get quotes from multiple companies: Compare rates from different insurers, as the base premiums and bundling discounts can vary significantly.
• Take advantage of other discounts: Look for opportunities to stack multiple discounts, such as safe driver discounts, loyalty discounts, or low-mileage driving discounts.
• Review your policies regularly: Shop around and compare rates from other insurers periodically, especially after significant life events or changes in your circumstances.
• Improve your credit score: In states where credit scores are considered in determining insurance rates, improving your credit score may help lower your premiums.

Bundling insurance can offer benefits such as simplified account management and potential savings on premiums. However, it's important to compare rates and coverage options from multiple insurers to ensure you're getting the best deal.

Companies that offer bundling

Several companies offer bundling services for home and auto insurance. Here are some of the top companies:

State Farm

State Farm is the largest property and casualty insurer by market share. It offers a bundling discount of up to $1,273 per year. The company has a wide network of agents and advanced digital tools, resulting in high scores for customer and claims satisfaction. State Farm also covers boats, RVs, farms, and small businesses. However, it does not offer gap insurance for auto policies and is unavailable in Massachusetts and Rhode Island.

Allstate

Allstate is the 2024 Bankrate Award winner for Best for Bundling Home and Auto Insurance. It offers a bundling discount of up to 25%. The company provides a wide range of endorsements, including home-sharing coverage and green improvement reimbursement. However, Allstate scored below the segment average for overall homeowners' customer satisfaction and property claims satisfaction.

Farmers

Farmers Insurance offers an attractive bundling discount with average savings of 20%. They provide numerous discounts for both auto and home insurance and have local agents for personalized service. However, Farmers scored towards the bottom of the J.D. Power 2023 U.S. Home Insurance Study.

Nationwide

Nationwide is the 2024 Bankrate Award winner for Best Budget Home Insurance Company. It offers a bundling discount of up to 20%. The company sells its products through local independent agents and caters to almost every state, except Alaska, Florida, and Hawaii, among others. Nationwide has an A+ (Superior) financial strength rating from AM Best but scored below the industry average on the J.D. Power home insurance study.

American Family

American Family offers bundling discounts of up to 23% for home and auto insurance. They provide strong customer service and have fewer consumer complaints than expected for an insurer of its size. American Family offers a range of coverage options, including Diminishing Deductibles for both home and auto insurance. However, their services are not available in all states.

Amica

Amica is known for its excellent customer satisfaction and low consumer complaints. They offer bundling discounts of up to 30% for home and auto insurance. Amica provides a Platinum Choice package for homeowners, which includes extended dwelling coverage and increased liability limits. For auto insurance, they offer extras like full glass coverage and prestige rental coverage.

These companies provide competitive bundling discounts and a range of coverage options. However, it is important to compare quotes and consider your specific needs when choosing the best company for your home and auto insurance bundle.

Tips for bundling insurance

• Contact your insurance company: Ask about the types of policies that are eligible for bundling. This can depend on the company, so it's worth checking with your current insurer to see if you qualify for any bundling discounts.
• Ask about bundling when getting new quotes: When shopping for new insurance, ask about any savings if you were to bundle multiple products. Some companies may offer a discount for bundling home and cars, while others may let you bundle your boat, motorcycle, RVs, and life insurance.
• Compare possible savings: Before moving your insurance to another company for a bundling discount, compare your current coverage with the new quote to ensure you're getting the best price without losing coverage. For example, check if the deductibles and liability limits are the same.
• Get quotes: Use the estimation tools available on insurance company websites to see if you can save money by bundling. You may need to get a quote through an agent over the phone, which could take longer but may result in greater savings.
• Shop around: Get quotes from several different insurers to compare rates. Just because a company offers bundling doesn't mean you'll save money.
• Compare coverage: Ensure the insurance bundle you choose has the coverage you need, including any policy add-ons.
• Choose quality: Opt for a company (and an agent) with a solid reputation for quality and service, and that offers the coverage you need.

Frequently asked questions