Combining Auto And Home Insurance: Is It A Mistake?

There are many benefits to bundling home and auto insurance, such as saving money and simplifying policy management. Bundling insurance refers to the process of purchasing multiple types of insurance policies from the same insurance provider. For example, you could buy home, auto, and RV insurance from the same company. The primary reason that many people bundle car and homeowners insurance is to lower their premiums. A multipolicy discount could save you as much as 30%, according to some insurer websites, depending on the company and where you live. Bundling your auto and home insurance could be a great way to generate significant savings on both policies and make your insurance more convenient to handle with a single insurer. However, bundling isn't always the right choice to save money. You might end up dealing with multiple insurers even if you bundle. Some companies serve as affiliates, selling certain policies on behalf of other insurers.

Pros and cons of bundling

Pros of bundling home and auto insurance

Bundling insurance can help you save money and make it easier to manage your insurance policies. Most insurance companies offer a discount for purchasing multiple insurance policies, which can sometimes mean significant savings. For example, Progressive says 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.

There is 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. With bundled coverage, you can set up just one account, download one company's mobile app, and schedule automatic bill payments in one place.

You could also save on deductibles. For instance, if a tree branch falls on your roof and car, causing damage to both, some insurance companies will only charge you one deductible for such events. With policies from two separate insurers, you'd be liable for two separate deductibles.

Cons of bundling home and auto insurance

If you have specialized insurance needs, there may not be one 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.

Although bundling home and auto insurance typically reduces your premiums, it doesn't always deliver the biggest savings. Discounts for bundling 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 its customers in California save just 2% on average.

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. It's also important to compare customer reviews and data on claims handling from different insurers to make sure that using the coverage won't prove too difficult.

Discounts and savings

Bundling your home and auto insurance can be a great way to save money. Most insurance companies offer discounts when you purchase multiple policies with them. These discounts can be quite significant, with some companies offering up to 30% off your total insurance costs. Additionally, bundling can make managing your insurance policies more convenient, as you will only have to deal with one company for payments, services, and claims. You may also be able to manage all your bundled policies under a single online account or mobile app.

Bundling your home and auto insurance can also simplify the claims process. For example, if a single event, such as a storm, damages both your home and car, you will only have to deal with one insurance company and pay a single deductible. This can save you time and money.

However, it's important to note that bundling may not always be the cheapest option. It's essential to shop around and compare quotes from multiple insurance companies to find the best rates and coverage for your needs. Additionally, some companies may not offer all the coverage types or discounts you're looking for, so it's important to carefully review the policies before making a decision.

Customer satisfaction

Bundling home and auto insurance can make policy management easier as customers will typically be able to manage multiple insurance products through a single online account and mobile app. It can also streamline billing, as customers will only receive one bill for both policies.

However, bundling does not always guarantee savings. While bundling discounts can be significant, ranging from 15% to 30% on average, it is important to compare quotes from multiple insurance companies to find the best overall price. In some cases, purchasing separate policies for auto and home insurance from different providers may result in lower rates, even without a bundling discount.

Additionally, bundling may limit coverage and discount options. Customers should carefully review the coverage types and endorsements offered by the insurance company to ensure they meet their specific needs. It is also worth noting that some companies sell home insurance through partner companies, which means customers may still have to manage their policies with two separate insurers.

When considering customer satisfaction, it is essential to evaluate factors beyond just cost. Customers should also consider the quality of customer service, the availability of digital tools, financial strength ratings, and customer and claims satisfaction scores.

To maximize customer satisfaction, individuals should get quotes from several insurance companies, take advantage of other available discounts, review their policies regularly, and improve their credit score if it is a factor in determining insurance rates.

Overall, while bundling home and auto insurance can offer benefits, it is important to weigh these against the potential drawbacks and compare options from multiple providers to make an informed decision.

Policy availability

When it comes to auto insurance, State Farm offers coverage for teen drivers, rental cars, sports cars, and electric or hybrid vehicles. They also have a Drive Safe & Save® program that rewards safe driving with discounts of up to 30%.

For home insurance, State Farm offers coverage for homes, renters, condos, and life insurance. They also provide coverage for specific risks such as earthquakes and floods.

It's important to note that insurance companies may have exclusions or offer different coverage options in certain states, so it's always a good idea to check with the insurance company or a local agent to understand the specific policy availability and coverage details in your state.

Best companies for bundling

Bundling your home and auto insurance is a great way to save money and simplify your policy management. Here are some of the best companies for bundling:

State Farm

State Farm is the nation's largest property and casualty insurer by market share. It offers a remarkable bundling discount of up to $1,273 annually. It has a wide network of exclusive local agents and advanced digital tools, resulting in high scores for customer and claims satisfaction. State Farm also covers boats, RVs, farms, and small businesses, among other things. However, it does not offer gap insurance for auto policies.

Amica

Amica offers policies that can return up to 20% of your annual premium in dividends. It has excellent customer satisfaction and low consumer complaints, making it a great choice for bundling home and auto insurance. Amica has a 5-star rating from NerdWallet for both homeowners and auto insurance.

Auto-Owners

Auto-Owners sells home and auto insurance through local agents in about half of the US states. It has a variety of good options and draws fewer consumer complaints than expected for a company of its size. If an event damages both your home and car, Auto-Owners will reduce your auto deductible by the amount of your homeowners deductible.

USAA

USAA is only available to active military, veterans, and their families, but it offers cheap auto and home insurance rates for this group. It has a low level of auto insurance complaints and a very low level of home insurance complaints. USAA policyholders can save up to 10% by bundling home and auto policies.

American Family

American Family serves a limited number of states but offers bundled policies worth considering. Policyholders can save up to 23% when bundling home and auto insurance. The company also offers strong customer service and has fewer consumer complaints than expected.

Nationwide

Nationwide is a good choice for those seeking low-cost auto and home insurance rates and a good bundling discount of up to 15%. It offers accident forgiveness, new car replacement, and vanishing deductible options for car insurance. However, it is not available in Alaska, Florida, Hawaii, Louisiana, Massachusetts, New Jersey, or New Mexico.

Frequently asked questions