Car Insurance Discounts for Homeowners

Many carriers believe people who own their homes are lower risk so they offer auto insurance discounts for homeownership, even if policyholders don’t insure their home with the company. This discount is usually about 5% on average and applies to most types of coverage but it isn’t available in some states. For example, Progressive offers about 3% savings while Direct Auto advertises to offer as much as 15% savings. Motorists can get larger discounts of about 15% on average when they bundle home and car insurance. The cheapest company for bundling is State Farm with about 24% savings. Some insurers honor both types of discounts at the same time for applicants who own their homes.

The secret to having large savings for bundling auto and home insurance is to find a company with lower rates for both policies. If a company is expensive for one of the policies, the overall costs may not be competitive even after the discount. State Farm, Farmers, Nationwide and Allstate are the best candidates for bundling as they offer fairly cheap rates for both home and auto policies.

There are other advantages to bundling as well. For example, some companies charge only one deductible if people’s cars and homes are damaged as a result of the same incident like a storm or fire. Furthermore, not only can people get lower overall rates but also companies are more willing to insure a high-risk home when the owner likes to buy auto insurance as well with them.

To qualify for homeownership or bundling discounts, motorists (or their spouse’s) need to own their homes, their cars need to be registered to the same address as the home they own and often they need to provide proof of ownership in the form of mortgage statement, title deed, tax assessment or similar documents. Also, they need to live in a state where the discount is allowed.

Companies that offer car insurance discounts for homeownership already include questions about it in their quote forms and automatically include the savings in their quotes. Also, many companies have quote forms that allow motorists to see how much they would pay if they were to bundle by asking the relevant questions for both car and home insurance. So, applicants can see the overall costs to cover both risks with all the savings already taken into account.

Renters can get lower overall premiums as well if they buy both renters and car insurance from the same company but their savings range between 2 – 9%, while homeowners can get 5 – 25% discounts for bundling home and vehicle insurance policies. Both rages show the importance of shopping around to make the most of buying multi policies from one company.

Although companies are willing to offer good deals for buying multiple policies, some companies don’t offer bundling discounts for mobile homes or motorhomes.


Calculation of premiums requires complex algorithms that try to take every possible risk into account. They are enigmatic to the point that every company uses proprietary pricing to help ensure their losses do not outweigh their profits. Across multiple studies and decades, insurers believe the difference between renting and owning is one such factor. That is mainly why they offer cheaper car insurance for homeownership, even if you don’t bundle.

Home Owners Make Better Decisions

A long- held belief is that buying a house is a sign of increased social, moral and ethical behaviors that also lead to lower loss claims. An article published in Social Forces found that people who have the title to their house were 1.28 times more likely to be involved in community groups and 1.32 times more likely to join a civic association. It is argued that this increased social responsibility leads to safer decision-making once they get behind the steering wheel. And that is enough to charge less on automobile insurance for homeowners.

Tenants Make More Claims

This assessment seems to be supported by another study conducted in 2015 that directly compared drivers that rented with those that didn’t. The study evaluated 700,000 respondents over a two-year period and found that in the youngest age bracket 18 to 24, those that lived with their parents filed a high 24.4% claim rate, tenants were second at 19.7% and those that bought their apartment at this young age, only made claims 17.6% of the time. At 45 to 54 the difference between the three groups was only 1% and it was basically equal for the over 65-year-old group. Companies feel justified in offering lesser bundling savings for renters on car insurance because of this difference in loss suffered.

If you recently completed a home purchase, now is the time to get the maximum discount. Keep in mind that you may have to switch at least one policy to achieve it. Also, some companies offer much larger savings while a few others may actually work out more expensive overall after bundling. So, never ignore the power of shopping around for better deals because it clearly works.