If you have home and auto insurance, you may save money by bundling your policies. Most companies offer bundles that can save you an average of 10-25% on each policy. That’s nothing to sneeze at since AAA estimates that the average cost of car insurance is about $ 1,202 annually, and some people pay much more than that if they live in a high-cost area, have accidents on their driving record or have bad credit. But just because most insurance providers offer bundling discounts doesn’t mean they’ll always provide the best deal.
Benefits of bundling insurance
Bundling auto and home insurance or other types of insurance can often make sense. Here are some of the benefits you can expect if you bundle your policies:
- Lower premiums: How much you can save depends on which policies you bundle, which insurer you use, and where you live, but you can generally expect a discount when you bundle your policies. Many companies offer up to 25% in savings.
- One account: Rather than juggling bills from multiple insurers, you can access all your policies and payments in one place. That means fewer apps on your phone and fewer passwords to remember.
- One provider: If you enjoy the customer service you get with one of your insurers, it could be wise to bundle your policies with the company.
- A single deductible: Some insurance companies will only require you to meet one of your deductibles if an incident leads to a claim on both your car and your home. If you use separate insurers for each, you’d need to pay both deductibles.
[ More: COVID-19 Is Making Millennials Switch Up Their Car Insurance ]
What can I bundle?
Most insurers will let you bundle any insurance policies they provide. If you want to bundle your car insurance and renters insurance but your provider doesn’t offer renters insurance, you’re out of luck. That’s why it can make sense to go with a more comprehensive provider if you maintain multiple active policies. However, you should always compare the total cost to make sure you’re saving when compared to using different insurance providers. Some popular bundling options include:
- Car and home or condo insurance
- Car and renters insurance
- Car, home and life insurance
- Renters and pet insurance
- Car and other vehicle insurance (motorcycle, boat, etc.)
- Life and disability or long-term care insurance
- Health, disability, and dental insurance
The biggest savings are typically reserved for customers who have three policies or more with the same company. For example, you could potentially bundle your car, home, life and umbrella policies with the same provider.
How much does bundling typically save?
Bundling home and car insurance typically saves consumers an average of 16.1%, but the savings vary significantly by region. For example, if you bundle home and auto insurance in Mississippi, you would save an average of 23.2%, but if you bundled those policies in Florida, your average savings would only be 6.7%.
Bundling your car and renters insurance will yield a much lower discount. The average premium reduction for this type of bundling is only 7.9%. And the average discount for bundling condo and auto insurance is 11.6%.
Some insurers offer up to 30% discounts if you bundle three or more policies with them. But the savings you end up with will depend on a variety of factors, such as your coverage amounts and where you live.
[ Read: What’s the Average Cost of Car Insurance in the U.S.? ]
Tips on bundling insurance
It may seem like bundling is a great opportunity, and it often is. However, you should always follow these tips to ensure you get the best deal:
- Comparison shop: You should always compare the lowest cost of individual policies with the lowest cost of a multiple-policy bundle by getting customized quotes. You can use an online comparison tool or check for online quotes on different providers’ websites. You might find that it makes sense to bundle your car and motorcycle policy, for example, but cheaper to get an individual renters policy than to go with the same provider for all three. You’ll never know until you do your research.
- Go for the biggest discounts: It typically makes the most sense to bundle your car and homeowners policies since this type of bundle yields the deepest discount. If you have life insurance as well, consider bundling all three. Compare providers and the discounts they offer, but always compare total cost as well before making a decision.
- Ask about third-party insurers: Some insurance providers might use a third-party insurer or affiliate for an insurance product in a bundle. So while they may offer you a discount on your bundle, you won’t be dealing with the same provider for each policy. This may appeal to you less. Cutting out companies that use third-party insurers could narrow down your options for providers.
- Check your rates regularly: Circumstances change. An accident may fall off your record, you may get more driving experience, or you might move to a new location. You might decide you need more coverage for your home or less. All of these factors will affect your costs. Experts generally recommend shopping for insurance every six months to ensure you’re still getting the lowest rate, but if a life event happens before that (like the birth of a child, which may encourage you to purchase life insurance, or a car accident, which could increase your premium), go ahead and compare prices right away.
[Read: How to Choose the Best Renters Insurance]
Too long, didn’t read?
You can save up to 30% by bundling multiple policies with the same insurer, so it’s generally a good idea to ask about bundling options, especially on car and home insurance. But you should always compare the total cost of getting individual insurance policies with different providers before making your decision.
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