Both home and vehicle insurance is necessary and very valuable to protect your assets and defend you against liabilities. And there are many insurers selling both products and giving large discounts when customers buy both policies with them. Although bundling sounds like there will be one policy to cover both risks, often policyholders get two different products with their own policy numbers. The biggest attraction of bundling policies is the potential savings. Nevertheless, motorists should always get quotes for separate policies first and see if they will save on overall costs when they bundle.
Bundling discounts vary depending on the state you live in and the insurer. In some states like Florida, residents may not save much while in another state the savings can be over 20% on average.
Benefits of Bundling Home and Vehicle Insurance
Although there are various bundling opportunities depending on your insurance needs, the most popular and advantageous bundle is home and automobile insurance. Here are some of the key benefits of bundling them and some of the points to watch out;
Saving money is the main motivation for bundling. Many companies offer multi-line discounts but often they offer the highest savings for a home and auto policy combination. Usually the savings are between 10 – 20% and on average 16%. Nationwide, Allstate, American Family, Progressive and Farmers advertise to offer discounts. State Farm, GEICO, Travelers, Liberty Mutual and many other smaller car insurers offer varying levels of savings too.
Finding coverage can be easier when you are struggling to find coverage for one or both of them or they are expensive. For example, in some high risk regions it may be expensive or difficult to find home insurance due to act of nature risks. Offering car insurance as well to the same company can make it easier to get coverage and it may work out cheaper. Also, a company is less likely to drop vehicle insurance as a result of too many tickets or claims when they insure the home as well.
Dealing with one carrier can reduce paperwork for both parties. This can make things easier for you as you can see all your policies when you sign-in to your account with the insurer online. It also makes it easier if you have to make a claim on both policies for one incident.
You may pay one deductible when an event causes damages to both your home and car. Some companies may apply one deductible for the whole loss rather than one for each policy.
Convenience is another reason that attracts many people. If you know one company well and have one of the policies with them already, companies make it easier to bring over the other policy as well whenever you are ready. For example, if you have home insurance with one company already and your car insurance is coming up for renewal, they can quote for bundled policies and add the vehicle insurance if it all works out for you. They usually calculate the discounts you will get on home insurance when you buy car insurance as well with the same company and apply the discounts. So, you don’t need to try hard to synchronise to buy them together.
Often companies may sell you a different bundle like renters and vehicle insurance and let you switch from renters to home policy when you buy your home and adjust the discounts accordingly while keeping your bundle. So, most companies are keen to sell as many policies as possible to their existing customers and can be highly flexible in the process. For example, they may offer further discounts when another family member wants to buy their own car insurance too.
In other words, you may want to make the most of discounts available for customer loyalty if you decide to buy your policies from one company. Don’t just look at the savings you get today but look at the possible discounts and additional coverage opportunities when you are going to stick with one company. Check their loyalty programs and see what other benefits you will get if you stay longer with this company because you may end up staying with them a few years. For example, a few companies may start offering free Accident Forgiveness if you stay with the company for five years and had no accidents and tickets in the meantime. They may offer other benefits like reducing deductibles to their qualifying customers as well.
It is important to check that you get the coverage you want or you currently have when you bundle. For example, your current auto insurance provider may have great roadside assistance services and you may value it. So, make sure the new company offers similar benefits as well.
Potential Issues with Bundling
There may be some disadvantages to bundling as well. It can be harder to shop around and switch when you find a better deal for home or car insurance because you will lose the discount if you switch one of them. So, people can get complacent and don’t shop around for a while, which can result in higher costs.
It is easier to find a company to bundle with and get large discounts when you have a low-risk profile. But it may be harder to find one competitive company for both types of policies when one of them is considered high-risk. Then, it may make more sense to buy separate policies.
For example, if you have a recent at-fault accident, several traffic violation convictions and/or young drivers in your household you may get better rates from other companies that can make bundling pointless.
Also, if you found a great but smaller company for one of the policies, they may not offer the other product that you may need to switch for bundling. If you are getting a good deal already, you may be less willing to walk away from it.
Additionally, check carefully when you are bundling policies because it may not be a pure bundle in some cases. Sometimes, companies or agents may get you a policy for your home or car from a different company or a subsidiary of the company while they sell one of the policies in house. So, you may end up with two insurers at the end anyway.
Essentially, you need to find a company with good rates for both home and vehicle insurance. The discounts they offer may not be enough if they have great rates for car insurance but they are expensive for home policies. In short, bundling discounts may sound very enticing but they may not be for you or not at this moment.
Many insurers offer savings when customers buy several policies from them and they are often called multiline, multi-product or multi-policy discounts and often give the largest discount when customers bundle home and auto insurance policies. You may be able to save a lot of money or it may not be for you as you may be getting better rates for each from different companies. So, it is always best to get a few quotes for bundling with one provider or going for two different companies and compare the overall prices.