Many experts recommend buying home and auto insurance from the same company.
Known as “bundling,” buying multiple insurance products from the same company can save money, time, and effort over buying separate policies.
Keep reading to discover why it’s important to buy home and auto insurance from the same company.
How Bundling Works
Buying home and auto insurance from the same company is known as bundling. You are bundling multiple policies together into one unified policy.
Here are some fast facts about bundling:
- Most large insurance companies sell multiple types of insurance, including auto insurance, home insurance, and other insurance products
- You can save 5% to 20% per policy by bundling multiple policies together
- When bundled, your insurance policies still work separately: you pay your auto insurance deductible for auto insurance claims, and you pay your home insurance deductible for home insurance claims
- Even if your insurer doesn’t directly offer multiple types of insurance, they may partner with other providers to sell different types of insurance, allowing you to qualify for bundling discounts
Advantages of Bundling
Generally, bundling is the best choice for the average person. It saves money, makes it more convenient to handle your insurance, and can give you better peace of mind over juggling multiple policies.
Here are some of the biggest advantages of bundling multiple policies together:
Advantage #1: Save Money
The biggest advantage of bundling multiple insurance policies together is saving money.
The average person saves 5% to 20% per policy when bundling multiple policies together.
Insurance companies want as much of your business as possible. To reward you for buying multiple insurance products from the company, the company provides a significant discount on premiums.
5% to 20% may not seem like a lot, but it adds up: if you pay $100 per month for auto insurance and $150 per month for home insurance, then you’ll save $150 to $600 per year by bundling your home and auto insurance policy together.
Some companies offer even bigger savings for bundling, with some customers saving 30% or more by bundling multiple policies together.
Advantage #2: Streamline Paperwork
The more insurance companies you need to deal with, the harder your paperwork becomes. You may need to juggle multiple premium payment due dates, for example, and deal with multiple user accounts.
When you bundle home and auto insurance together, you can streamline all of this process, leading to advantages like:
- One premium for both your home and auto insurance policy
- One due date to pay your insurance premiums each month
- One insurance agent or customer service hotline to deal with
- One company’s policies, hours, and rules to remember
If you’re tired of dealing with multiple insurance companies for multiple insurance products, then bundling can make paperwork much easier.
Advantage #3: Ideal for Multiple Vehicles and Drivers
The more you add to your insurance bundle, the more you can save (at least in comparison to buying separate policies).
Instead of buying separate policies for you, your husband, and your teenage child, for example, you can bundle multiple policies together with your homeowners insurance.
In fact, you can bundle multiple policies together as long as you’re living at the same address. Many insurers allow roommates, for example, to bundle policies together to save money.
Advantage #4: Available for More Than Just Homeowners Insurance
You can bundle multiple policies together to save money even if you don’t own a home.
Other bundling opportunities include:
- Bundle renters and auto insurance together
- Bundle multiple auto insurance policies together
- Bundle life insurance and auto insurance together
Depending on your insurer, you may be able to bundle several policies with your auto insurance to save money.
Advantage #5: Your Insurer is Less Likely to Cancel Your Policy After Multiple Claims
If you have recently filed multiple costly home or auto insurance claims, then your insurer may decline to renew your policy. You’re too high-risk to insure, and you’re costing the insurer too much money.
However, if you have multiple insurance products with a single company, then the insurer is less likely to cancel you. You have more business with the insurer, and the insurer may have more leeway than if you had a single policy with the company.
Disadvantages of Bundling
Bundling is the right option for many people, but it’s not the right option for everyone.
Depending on your situation, you may not save much money by bundling home and auto insurance together.
Some companies don’t allow you to bundle: some companies specialize in providing home or auto insurance, for example.
Or, high-risk drivers may need to work with specialty auto insurance companies that exclusively offer auto insurance with no bundling or discounts.
Some of the disadvantages of bundling include:
Not Guaranteed to Save: Bundling can lead to savings of 5% to 20%, but you’re not always guaranteed to save. Some companies have cheap auto insurance and expensive home insurance, for example, or vice versa. Or, some companies offer greater discounts than you would get by bundling. Although bundling can save money for some, it’s not guaranteed to save money for everyone.
Makes It Harder to Switch Companies: Insurance companies love having customers with multiple insurance products because it makes it harder to switch companies. You’re used to paying your home and auto insurance with the same company every month, and you’re used to dealing with that company for everyone. Making the switch could be harder when you’re dealing with multiple policies instead of a single policy.
The Insurance Company Could Go Bankrupt: Although it’s unlikely, insurance companies can and do go bankrupt. If you have your home and auto insurance with a single company, and a natural disaster strikes your region, then your local insurance company could be unable to cover the costs of the disaster, forcing them to declare bankruptcy. In this situation, you may not receive the compensation you are owed for your home and auto insurance policy. Bundling puts all your eggs in one basket, exposing you to more risk.
Not Ideal for High-Risk Drivers: High-risk drivers may only have a few insurance options from which to choose. Most of these insurance options are companies specializing in insuring high-risk drivers. These companies rarely offer home insurance, which means you can’t bundle home and auto insurance together to save money.
May Lose Discounts or Coverage Options: When you switch to a new insurance company, you may lose the insurance products and discounts you had with your previous company. You may save 10% on car insurance by bundling, only to lose a 12% loyalty discount with your previous insurer. Check discounts and coverage options before you switch.
For most drivers and homeowners, bundling is a great way to save money.
When you buy home and auto insurance from the same company, you can save money, streamline paperwork, and enjoy a greater level of convenience.
Contact your insurance company to make the switch. Most insurers make it easy to bundle.