Bundling home and auto insurance refers to purchasing both types of insurance coverage from the same provider. This is a common practice that offers several potential benefits for policyholders.
The main advantage of bundling home and auto insurance is cost savings. Insurance companies typically offer discounts of 10-15% or more when you buy both home and auto coverage together. This is because it is more efficient for them to service a client with multiple policies through one provider. Bundling can add up to significant savings over time.
Beyond financial benefits, there are also convenience factors in bundling insurance. You only need to work with one agent and insurance company for all your property and vehicle needs. This streamlines the process for obtaining coverage, filing claims, and managing policies. Bundling also ensures proper coordination between your home and auto policies.
While bundling insurance has many advantages, it’s not the right choice for every home and auto owner. We’ll explore the pros and cons in-depth to help you decide if combining policies is your best option.
Cost Savings
One of the biggest benefits of bundling home and auto insurance is the potential for significant cost savings. By insuring both your home and vehicle with the same company, you can often save 10-15% on your total premiums. This adds up to hundreds of dollars in savings per year for the average policyholder.
Bundling works by giving you a multi-policy discount that combines the premiums for your home and auto coverage. Insurance companies offer these discounts as an incentive to keep all of your policies with them. The more lines of insurance you have with one company, the larger your discount will typically be.
Some insurers will give you an automatic bundling discount of 5-10% just for having both home and auto with them. On top of that, you may qualify for other discounts like a claims-free bonus or loyalty discount for being a long-term customer. Combining all applicable discounts can lead to double digit percentage savings compared to keeping the policies separate.
The bundling discount is applied after other discounts, maximizing your overall savings. For example, let’s say you qualify for a 20% safe driver discount on auto and a 15% security system discount on home. With bundling, you could then get an additional 10% off the already-discounted premiums.
Insurance companies want to retain multi-policy customers, so bundling makes good financial sense if you currently have separate home and auto policies. Just make sure to compare bundle quotes from different insurers, as the savings can vary significantly by company.
Convenience
Bundling auto and home insurance provides a major convenience factor for policyholders. With a bundled policy, you only have one policy renewal date to keep track of rather than separate renewal dates for home and auto. This simplifies the process of managing your policies.
Additionally, bundled policies have a single deductible that applies to claims for both your home and auto. If you file claims for both in the same year, you only need to pay one deductible rather than separate deductibles. This can save you money if you have the misfortune of needing to file multiple claims within your policy period.
With just one insurance company and agent for both policies, you also simplify payments, paperwork, and communications. You have a single point of contact for questions or claims for home and auto. Overall, bundling streamlines your insurance coverage and makes it easier to manage multiple policies.
Customer Service
One major benefit of bundling home and auto insurance is having a single point of contact for claims and customer service. When policies are bundled, the same insurance company handles both home and auto coverage. This makes the claims process smoother if you ever need to file one.
Rather than contacting two separate insurance providers and navigating two insurance claims processes, you only need to make one phone call to your insurance company’s customer service line. The bundled insurance provider has all your policy information in one place and can handle the claim from start to finish.
Filing claims is stressful enough without having to coordinate between multiple insurance companies. Having one point of contact simplifies things greatly. The bundled insurance provider can pull up your policy, initiate the claims process, arrange for any necessary inspections, and handle the paperwork.
Bundling home and auto takes the hassle out of the claims process. If you ever need to file a claim, you won’t need to make multiple phone calls and repeat information. The convenience of a single point of contact is a major customer service advantage of bundling insurance policies.
Discounts
Bundling home and auto insurance can help you qualify for a variety of discounts that may lower your rates even further. Most insurance companies offer a bundling discount, which provides around 10-15% off your total premium when you insure both your home and vehicle with them. On top of this, you may also be eligible for other discounts like:
Multi-policy discount: An additional 5-10% off for bundling 3 or more policies like home, auto, boat, motorcycle, etc.
Loyalty discount: A discount for being a long-time customer, often 5% or more.
Pay-in-full discount: Around 5% off for paying the full 6-month or 12-month premium upfront rather than monthly installments.
Claim-free discount: Up to 15% off for having no claims on your policies over a set period of time.
Safety feature discounts: Discounts for having safety devices installed like burglar alarms, fire alarms, anti-theft devices, etc.
The more discounts you can qualify for, the more you’ll save. Bundling makes it easier to qualify for multiple discounts at once. Make sure to ask your insurance agent what discounts you may be eligible for as a bundling customer. The savings can really add up over time.
Coverage Gaps
Bundling your home and auto insurance can help prevent costly coverage gaps that leave you vulnerable. When you have separate home and auto policies with different insurance companies, there’s a risk of overlapping or insufficient coverage.
For example, if you’re involved in a car accident near your home, issues can arise over which policy should cover any property damage or liability claims. Your auto insurer may claim that your homeowner’s policy should cover it since it occurred on your property, while your home insurer argues it should fall under auto insurance since a vehicle was involved. You could get stuck in the middle without full coverage.
With a bundled policy from one insurer, there’s no question over which policy is primary. Your single insurer will handle the claim and coordinate coverage between your home and auto policies. This prevents finger pointing between insurers and ensures you get the complete coverage you need.
Bundling also reduces the chance of coverage gaps when policies renew at different times. It’s easy to forget to renew one policy when juggling separate renewal dates. If your auto policy lapses but your home policy renews, you could be uncovered for certain claims tied to your vehicle on your property. With one bundled policy on the same schedule, your coverage remains intact.
By bundling home and auto policies, you get simplified coverage with fewer gaps. Your insurer coordinates coverage between policies and reduces the chance of lapses.
Downsides of Bundling Insurance
While combining home and auto insurance policies under the same insurer provides many potential benefits, there are some drawbacks to consider as well:
May miss out on better individual deals – Just because an insurer offers a discounted bundle package doesn’t necessarily mean it’s the best rate available across the board. Doing your homework and getting quotes from multiple providers for home and auto insurance separately may reveal opportunities for even greater savings overall. Don’t assume bundling will provide the lowest premiums without investigating alternatives.
Risk of non-payment – If the bundled policies have one collective bill, it only takes missing one payment to risk coverage gaps on both home and auto at the same time. Having separate policies means a lapse in one won’t necessarily affect the other.
Inability to split policies – Some bundle packages may require keeping the home and auto insurance together. That lack of flexibility could be problematic if you later want to switch either policy to a different insurer. Make sure to find out if the policies can be split up.
Too much coverage – While having overlap in certain areas of home and auto coverage provides protection, in other cases it may result in paying for redundant coverage you don’t really need. Be sure to analyze the bundle details closely to avoid this.
Bundling insurance policies involves tradeoffs. Weigh the advantages against potential downsides carefully based on your specific situation and insurance needs. Don’t assume it’s always the best option. Shop around and compare standalone rates too.
Who Benefits Most from Bundling Home and Auto Insurance?
Bundling your home and auto insurance tends to provide the biggest savings and convenience for people who own multiple policies.
Homeowners who also have car insurance are prime candidates for bundling. Since they already have two policies with one insurer, combining them streamlines the process. Bundling home and auto coverage avoids the need to make multiple payments, keep track of separate renewal dates, or manage different deductibles.
Drivers with excellent records also gain the most from bundling discounts. Most insurers offer a break on premiums to safe motorists with clean driving histories and no accidents or tickets. Home insurance bundles allow good drivers to stack that discount on top of the savings for combining policies. With a bundled policy, you can multiply your overall discount.
Customers with multiple cars on their policy also stand to reduce costs. The multi-car discount available from many insurers gets a boost when you add in home insurance as well. That increases the percentage you save compared to keeping home and auto coverage separate.
Bundling works best for responsible customers juggling multiple policies. Combining home and auto insurance provides convenience and optimizes the available discounts.
How to Bundle Home and Auto Insurance
Bundling your home and auto insurance policies is a straightforward process. Here are the key steps:
Contact your current insurer. The easiest option is to contact the company that currently insures your home or auto policy. Tell them you’re interested in bundling both policies together for a multi-policy discount. They’ll let you know if they can offer a competitive bundle rate.
Shop bundle deals. If your current insurer can’t offer an appealing bundle price, shop around. Look for insurers that actively advertise bundle discounts. Get quotes from a few companies to find the best rate. Online quote tools make it easy to compare bundle rates side-by-side.
Choose the best deal. Once you’ve collected a few quotes, pick the insurer offering the lowest bundled price. Make sure to evaluate factors beyond just price too, like customer service reputation and coverage options.
Complete the application process. The insurer will have you fill out applications for both policies. This lets them underwrite both a home and auto policy together. Be prepared to provide detailed information about your home, vehicles and drivers.
Activate the bundle. Finally, the new bundled policies will be activated once approved. Make sure to cancel your old separate policies to avoid double-paying premiums. Enjoy the convenience and savings from your new insurance bundle.
Bundling home and auto insurance is one of the easiest ways to save on your policies. Take the time to shop around and you could enjoy considerable savings while simplifying your insurance needs.
Conclusion
Bundling your home and auto insurance provides a number of benefits that can save you money and make your life easier. By packaging multiple policies with the same insurance company, you can take advantage of multi-policy discounts and premium reductions. This allows you to get cheaper rates than if you purchased home and auto insurance separately.
Bundling also streamlines your insurance coverage into one policy, one bill, and through one insurance agent. This consolidates your insurance needs for added convenience and simplicity. You’ll also benefit from having all your policies under one roof when it comes time to file claims or get customer service support. Your insurance company has full visibility into all your policies, which can mean faster service.
That said, bundling isn’t the best option for everyone. You may find better rates or coverage by mixing and matching policies across insurers. Do your research and get quotes for both bundled and unbundled options before deciding what works best for your situation.
If you do choose to bundle, make sure to ask your insurance company about all available discounts to maximize your savings. Inquire about multi-policy, multi-car, and loyalty discounts. Also discuss appropriate coverage limits and deductibles to get the right protection without overpaying. With a little planning, bundling home and auto insurance can be a simple way to enjoy peace of mind while spending less.