Should I Bundle My Car and Home Insurance?

The older you get, the more you have to insure. First, it’s your car, then your home, then your life and the list goes on.

These are all valuable things worth protecting, but the costs can add up. Americans saw their rates for homeowners insurance rise by more than 45% from 2008 to 2017, according to the Insurance Information Institute.

Home and auto insurance policies are two of the most common types of coverage, and it can be an expensive headache to find the right policies. But there is a way to simplify and save — bundling insurance.

When you bundle home and auto insurance policies together with the same carrier, you can lower your premium significantly.

What is bundling?

Any time you group together more than one type of insurance policy from the same insurer, you are bundling insurance policies. When you do this, most insurance companies offer bundling discounts, also known as a multiline or multipolicy discount.

The reason for bundling discounts is simple — insurers want more of your business! If insurance companies can persuade you to bundle home and auto insurance policies that you currently have with other providers, they’re getting a larger monthly premium from you than they would for just one policy, even if it’s discounted.

Providers will usually allow you to bundle any policies they offer. Car and home insurance bundles are the most common, but many insurers offer discounts for bundling renters and car insurance policies, as well as combinations of life, boat, RV and other specialty insurance offerings.

Savings for bundling insurance can vary — and will usually increase as you bundle more policies — but typically range between 10% and 25%. Most companies advertise savings of up to a certain percentage, but the best way to find out what you can save is to get a few quotes and compare your bundling discount options.

[ Read: The Simple Guide to Car Insurance ]

Pros and cons of bundling home and auto

Pros 

• Discounts: More often than not, your insurance provider will offer you a discount of 10% to 25% for bundling home and auto insurance. Some insurers even advertise up to 29% savings on some policies when you bundle.
• Convenience: When you bundle car and home insurance — and any other policies — with the same company, it’s one less bill to manage. You don’t have to call different agents for insurance claims since the entire process is simplified and streamlined under one provider.
• Security: If you frequently make claims on any policy, you are in danger of having your insurance company drop you. The more policies you have with one provider, the less likely this is to happen. If you tend to get into a lot of car accidents, it may be smart to bundle your car policy with home and life insurance to reduce your risk of losing coverage.
• Combined deductibles: Some insurers will even combine your deductibles when you bundle. That means a claim involving more than one policy wouldn’t be subject to multiple different deductibles. A storm, for instance, could easily damage both your home and your car. In that case, a combined deductible could significantly lower your out-of-pocket costs.

Cons 

• You could miss out on savings: Because it’s simpler to combine policies with one insurer, you may be less likely to shop around for the best rates. In some cases, you may find lower rates by getting a variety of home and auto insurance quotes and picking the ones that offer you the lowest rate outright.
• It may be less convenient than you expect: Some insurers bundle policies through affiliate providers, which still gets you a discount but removes some of the convenience of dealing with one agent. When you’re making home and auto insurance bundle comparisons, be sure to ask about how you’ll make claims for each of your policies.
• Your discounts may erode over time: Discounts for bundling insurance are designed to build loyalty, so it’s easier to set it and forget it. This may be convenient, but if you don’t pay attention, your insurance provider can gradually raise your rates with each renewal and chip away at your savings.

[ More: The Average Cost of Home Insurance ]

Compare home and auto bundles, by insurance company 

Tips for bundling home and auto insurance

All bundling is not created equal, and sometimes you may not get a great deal. However, there are a few things you can do to make sure you get the most out of bundling car and home insurance. Here are a few tips:

Shop around

Whether you’re bundling or not, you’ll never know if you’re getting the best rates unless you shop around. Compare auto and home insurance quotes — both as individual policies and bundled — and be sure you are getting a deal you’re happy with.

Ask about affiliates

If convenience is a priority for you, then don’t forget to ask your agent about any affiliates or third parties that would be involved in your policy. It might not make sense to go through all the effort of combining policies for a small discount if you won’t also save yourself time and headaches when you make claims.

Don’t bundle more than you need

Insurance companies always want you to buy more, and bundling discounts are a big incentive they use to encourage that. But that life insurance policy might not make sense if you’re just out of college with no dependents and a starting salary. Only pay for what you need — and reevaluate those needs regularly.

Check in regularly 

Your insurance needs, along with your rates and potential discounts, change over time. You should check in with your agent frequently — and compare prices with other insurers — to make sure you’re getting the best available premiums. Renewal time is usually a good reminder to check in and make changes.

[ See: Best Cheap Insurances ]

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