Can You Save by Bundling Your Home and Auto Insurance? 3 Pros, 3 Cons and What to Consider

By Chika

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Last Updated: December 24, 2022

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Most people with homes and cars in their possession have home and auto insurance.

Though you may have purchased each coverage at a different time, you could have interacted with various insurance providers. Furthermore, you can end up shelling out more money than required. 

Customers who "bundle" their policies—that is, buy both types of insurance from the same carrier—often receive discounts from the insurer.

Insurers do this since the discount increases your propensity to buy more insurance and lowers the likelihood that you'll move to a different provider. However, is this the right move for you?

In this article, we look at  how "bundling" insurance policies works, plus if it's the right option for you.

 

What is Bundling?

Insurance bundles happen when you decide to purchase several policies from the same company.

This may cover things like your life insurance, home and auto insurance.

You utilize the same provider for all of them as opposed to using different insurers for every coverage. Although you would still have to pay separate invoices for each insurance, depending on your business, this might make it simpler to pay premiums each month.

 

 

3 Pros of Bundling  

There are many reasons you might choose to bundle your insurance policies.

1. More savings.

The bundling discount can save you a lot of money every year. This is the main reason most people bundle their insurance policies.

According to the Insurance Information Institute, bundling your home and vehicle insurance can save you 5% to 15%, but other insurers may provide even greater savings.

Bundling might help you save more than $500 yearly since, according to the National Association of Insurance Commissioners, the average homeowner pays $1,272 for homes insurance and $1,204 for auto insurance each year.

But don't just think the first discount or coverage you're given is the best. To make sure you're receiving the greatest value possible, you'll need to comparison shop. 

2. Simplicity.

Another reason why some individuals want to bundle is the simplicity of dealing with just one supplier. You will only need to download (and figure out how to use) one app if you combine your house and auto insurance coverage. You will only need to have a single insurance company account.

You will be able to monitor all of your policies, submit claims, and pay premiums in one location thanks to this. If you enable automated payments, it will also reduce the number of locations where your financial information is kept.

3. You file lots of claims.

You run the danger of having your insurance cancelled if you file too many claims under your auto or house policies.

Although it is less common, it is not a certainty if you are a customer of both their home and vehicle divisions. But it could be advantageous to certain folks.

 

 

3 Cons of Bundling 

1. Could be more expensive.

If you have decided to bundle your car and home insurance, you may save on premiums—at least at first. This is because you might not take the time to thoroughly compare pricing amongst different suppliers.

This cost savings is possible since bundling is only effective when you don't shop around. In other words, when you combine your insurance plans, you can end up paying more. Failing to compare policies is advantageous to the insurance company, not you.

2. Less likely to switch providers.

Bundling helps to build customer loyalty because you less likely to shop around or switch providers to get a better price. This is good for the insurer because the chances of retaining your business is high, even if the rates are no longer competitive with other insurers.

3. May not be bundled with one provider.

The bundled policies you purchase are not issued by the same insurer. Some insurers offer insurance policies through affiliates. This means if the affiliate arrangement ends you would need to find another insurer. Also, you could be hit with a significant rate rise if the affiliate changes their policy. 

 

 

3 Things to Consider Before You Bundle Home and Auto Insurance

Keeping track of your insurance bills requires effort.

When it comes time to renew, the majority of folks don't bother looking around. They decide against doing so since learning about new possibilities would need too much time and effort.

When looking for new home and auto insurance, resist the urge to choose the first option. You might think about a number of things to aid in your decision.

1. Decide on Coverage

How much coverage do you need right now? If you pay for more, you are wasting money this year.

You might also be wasting money in the future. There's no guarantee that your needs will increase over time. You can always increase your coverage later if you do end up needing it.

2. Compare Costs

Compare more than just costs between different companies. Consider the price of various coverage premiums from various businesses. Then contrast those with any group discounts that each business provides.

Sometimes it may be less expensive to purchase individual policies from a less expensive provider than to bundle them with a more expensive insurer.

Know what you are purchasing. Who is supplying each component of your packaged plans? Ask about it if you don't want your insurance to be packaged through an affiliate. Before making any purchases, you should research the businesses you'll be working with.

3. Don't Shop Just Once

Put off automating your insurance.

The mere fact that you have two insurance policies should not make you more devoted to the firm from whom you purchase insurance. Shop around for prices every couple years.

Examine your current plans to see if they fit your needs and budget. Don't allow having a bundle stop you from finding for a different insurance if they aren't.

 

 

Should You Bundle Your Home and Auto Insurance?

Using the same insurance provider for your house and car policy might help you save money. If you want to simplify your insurance, save more money, or have a lot of claims, you might want to think about bundling.

Make sure you complete your research on plan pricing before looking at bundling discounts to save the most money. The same coverage may be offered by more than one supplier at less expensive prices. A bundle with a different company may have a higher overall cost than the research.

Photo by Erik Mclean

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