Benefits of bundling home and auto insurance

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, which we will always identify, all opinions are our own. By refinancing your mortgage, the total finance charges may be higher over the life of the loan.
Credible Operations, Inc. NMLS # 1681276, is referred to herein as “Credible”.

If you own a house and a car, you probably have insurance coverage for both. But since you probably purchased the policies at different times, you may have gone through a different insurer for each one. And you might pay more than necessary as a result.

Insurers generally offer discounts to customers who “bundle” their policies, that is, who buy both forms of insurance from the same insurer. They do this because the discount makes you more likely to purchase additional policies and reduces the risk of you switching to another insurer.

Although bundling can save you money, you’ll want to shop around to find the best rate available for each of your insurance policies.

Here’s what you need to know about bundling home and auto insurance:

What is a home and auto plan?

Home and auto insurance helps you protect two of your most valuable assets. When purchasing these policies, you may experience what is known as a bundle discount or a multi-policy discount. Insurers offer this incentive to entice customers to take out multiple policies with them.

According to the Insurance Information Institute, combining your home and auto policies can save you 5-15%, but some insurers may offer deeper discounts.

With the average homeowner paying $1,272 a year for home insurance and $1,204 a year to insure a vehicle, according to the National Association of Insurance Commissioners, bundling could save you more than $500 a year.

However, don’t assume that the first discount – or policy – offered to you is the best one. You’ll need to shop around to be sure you’re getting the best deal available to you. Credible makes it easy to compare policies and rates from different insurers to help you get the best policy for your needs, at a great price.

Compare home insurance from the best insurers
  • Entirely online, take out home insurance instantly
  • Compare quotes from highly rated home insurance companies in your area
  • No spam, phone calls, upsells or fake quotes

Get insurance quotes now

Benefits of bundling home and auto insurance

The exact amount you save by bundling your home and auto insurance policies varies by insurer. But saving money isn’t the only reason to bundle your policies. Other benefits include:

  • Simplified font management: Having all your policies with the same insurer makes it easy to view and change your coverages, review your bills and pay because you can do it all from one account.
  • Insurance Security: Bundling your policies could make your insurance provider less likely to drop your landlord’s coverage if you file multiple auto claims.
  • Combined deductibles: Some insurance companies set a single deductible shared between all your policies. So rather than having to pay a $500 deductible for damage to your home and another $500 deductible for damage to your car resulting from the same windstorm, for example, you would only have one $500 deductible that applies to both assets.
  • Increase in savings: Bundle discounts and other policy discounts are not an opportunity. You can stack discounts for even more savings.

Learn more: What does home insurance cover?

Disadvantages of bundling insurance policies

Bundling auto and home insurance policies makes sense to many consumers, but it’s not always the best solution. Consider these potential downsides:

  • Coverage may be insufficient: Bundled discounts can encourage you to shop by price rather than coverage. Coverages vary from insurer to insurer, and not putting coverage first can leave you underinsured.
  • Bundling discourages purchases: If you feel like you’re getting a very low price on your fonts, you might be less inclined to shop around for a better deal.
  • Reduced flexibility: Bundling policies means that you must accept the coverage offered by the insurer. You may find that the best home and auto insurance policies come from two different providers.
  • Not always cheaper: An insurance company with higher premiums than its competitors won’t necessarily discount enough of a plan to save you money.

Check: Comprehensive car insurance: what does it mean?

How to save the most money

You can expect to save at least 5% on your premiums if you purchase two or more insurance policies from the same insurer. But to maximize your savings, try these tips:

  • Review your policies. Periodically review your insurance coverages to make sure you’re not paying for coverage you no longer need, such as an endorsement for an expensive musical instrument you no longer own or collision damage waiver on a passenger car. low value.
  • Look for additional discounts. Maybe your credit score has improved or you’ve retired since you took out your policy. These life changes could entitle you to lower rates. You might also have gotten a discount if you recently installed sophisticated security equipment in your home.
  • Buy quotes. As you review your coverages and look for discounts, shop around to see if you can find the right coverage for less with another carrier.
  • Consider increasing your deductible. It’s important to make sure you can pay your deductible in case you need to file a claim. otherwise, you will not be able to complete repairs to your home or car. However, you may be able to get away with a higher deductible if your insurer combines deductibles for bundled policies.

Good to know: A deductible is the amount you pay out of pocket before your insurance starts paying for a covered event or peril. Deductibles work the same way for homeowners and auto insurance. Generally, the higher your deductible amount, the lower your premium will be.

Is bundling auto and home insurance right for me?

Bundling policies can save you money, but not always. It makes sense to compare quotes for bundled and separate policies from a few different providers.

That said, some circumstances lend themselves well to grouping, and others do not:

  • Large owners insurance contract: The larger your policy, the more you can save. If you’re insuring a high-value home or a home in an expensive market, a package could earn you a significant discount.
  • Bad credit: A bad credit history can prevent you from obtaining preferential rates from certain insurers. Low-cost policies, even if they come from separate insurers, might cost you less than bundled policies from an insurer with stricter credit guidelines.
  • High car insurance premium: If traffic tickets, accidents, or other circumstances have resulted in unusually high auto insurance premiums for you, a discount auto insurer will likely be a cheaper option than bundled policies from a traditional carrier.

Shopping for homeowners and auto insurance is serious business that can mean the difference between securing your financial future and exposing yourself to unnecessary risk and expense. This is why it is important to compare rates with multiple carriers before purchasing a policy.

Credible lets you compare rates from over 40 reputable partner carriers. Our platform is easy to use and you’ll quickly have the information you need to find a great deal on the best policy for you.

Need home insurance?
The Credible Marketplace, which includes Young Alfred’s insurance services, makes it easy to find an insurer and policy that’s right for you.
  • fully online — Complete all insurance forms online and purchase home insurance without ever picking up the phone. If you have any questions, Young Alfred offers 24/7 customer service.
  • Save time, money and effort – Compare quotes from highly rated home insurance companies in your area. It’s quick and easy.
  • Data Privacy — Your information is kept secure. We do not sell your information to third parties and you will not receive any unwanted phone calls from us.

Get insurance quotes now

Disclaimer: All insurance related services are provided by Young Alfred.

About the Author

Daria Uhlig

Daria Uhlig is a Credible contributor who covers mortgages and real estate. His work has appeared in publications such as The Motley Fool, USA Today, MSN Money, CNBC and Yahoo! Finance.

Read more

Comments are closed.