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Bundling home and auto insurance
Mortgage lender requirements for homeowners insurance
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Hazard insurance vs homeowners insurance
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Bundling your home and auto insurance policies can save you money and offer perks other than just the discounted rates, but is it worth it?
Some major insurance companies offer home and auto insurance bundles, which boast a number of perks, discounts, and unique coverage opportunities
Bundling your home and car insurance policies can save you up to 20% on your insurance premiums
Bundling your coverage is also convenient, as all of your protection can be in one place — often with one monthly bill
In the event of simultaneous damage to your home and car, you may only have to pay a single deductible if your homeowners and auto coverage are bundled
Most insurance companies don’t sell strictly homeowners or auto insurance and nothing else, so if you go to a company for a car insurance policy, there’s a good chance they’ll try and convince you to bundle it with a homeowners or renters insurance policy.
This probably seems like a good deal to most. After all, getting all of your property insurance coverage through a single company often saves you the time, money, and hassle of figuring out which company is insuring what. Additionally, insurance companies who offer multiple types of property insurance often give you generous discounts and unique product tiers when you bundle your protection.
But make sure you’re not simply bundling home and auto insurance for the sake of it; there are cases when bundling is actually more expensive than mixing and matching, and other times when you should go to a specialized insurer for the best coverage.
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A good homeowners and auto insurance bundle will ideally save you more money than if you purchased the policies at two different companies.
There are a number of other benefits to bundling, but we’ll start with the obvious reason to combine your home and auto insurance policies:
Combining your home and auto insurance under one insurance company often gets you a solid discount. Also called a multi-policy or companion discount, bundling typically saves customers anywhere between 15-20% on their insurance premiums.
Bundling may also be the way to go if you’re looking for strategic savings. This strategy isn’t noticeable right off the bat, but it pays dividends during a specific event or extenuating circumstance, like a tree falling through your garage and crushing your car. Without bundling, you’d have to file separate claims for the same event, with separate insurers, and pay separate deductibles. By bundling those policies under one carrier, you may have to file just one claim for the same event and pay just a single deductible.
Bundling makes managing policies easier, cuts down on paperwork, saves you time trying to remember login information and passwords, and reduces the inconvenience of having to communicate with multiple insurance companies about multiple policies.
It also reduces the time you’ll spend talking to an agent about changing or adding to existing homeowners or car insurance policies. If the agent already knows who you are and is aware of your assets and family situation, it should be a seamless process when you need to add other types of insurance, apply discounts, or add endorsements to a homeowners or car insurance policy.
Insurers also offer unique product tiers, or more complex bundles, if you decide to combine all of your policies. If you have a car, home, rental property, boat, and RV, it is common for insurers to offer one policy package, since most auto and home insurers also specialize in other types of personal property protection. Unique product tiers can be advantageous as they cut out paperwork, limit you to one bill, and you may only have to pay a single deductible for all of that coverage.
As a general rule of thumb, insurance companies are less likely to cancel your home insurance if you already have several active insurance policies with them. This is pertinent to homeowners insuring properties deemed “high-risk” by insurers. If your home is in an area that experiences frequent extreme storms, wildfires, or crime, you have a better chance of staying insured if you get all of your insurance policies through a single company than if you insure each of your assets with different companies.
Why are they willing to cover you, despite the risk? Because you’re a loyal customer and they see the bigger picture: refusing you home coverage may result in you dropping your existing auto policy and going with a different insurance company altogether.
For all the benefits of home and auto insurance bundling, there are also several key disadvantages and specific instances where it may not be in your best interest. Sticking with one company may also induce tunnel vision and cause you to miss out on special discounts and offers from other insurance companies.
Owners of high-end or performance cars won’t find much value in traditional auto insurance companies and should mix and match their policies, rather than bundle. With sky-high repair costs for high-end vehicles standard auto insurance companies will either charge exorbitantly high premiums or outright decline to cover it altogether. If you’re going to pay a premium for auto insurance coverage, you’ll want to go with an insurer who specializes in expensive vehicles.
While bundling may save you money in the short term, you may be unknowingly bundling two lesser-covered home and auto insurance policies that cost you more out of pocket in the long term. If you’re perfectly happy with the rates and coverage in your current homeowners and auto insurance policies (and you’re not necessarily worried about missing out on the cheapest rate imaginable) a bundle might not make sense for you.
Bundling auto and home insurance policies with one insurance company may make you complacent and cause you to miss out on better rates of coverage and better protection. While brand loyalty is great and an indication that the insurer is doing their job, it can also lead the insured to base their coverage decisions on what is comfortable rather than financially sound and practical.
The option to bundle your auto and homeowners insurance policies is often available at the beginning of your insurance application process. Your insurer will typically ask you if you’d like to insure any other type of property.
If you already have an auto or homeowners policy with a different company but want to switch to a single company to complete a bundle, be sure you’re following the proper procedure to ensure that you won’t have to pay cancellation fees or have lapses in coverage.
At Policygenius, our goal is to make the auto and homeowners insurance purchasing process even more convenient. We’ll let you know if it makes sense to bundle or to mix and match with multiple insurance companies based on your specific coverage needs.
Insurance companies often differ in terms of the type of multi-policy discounts and perks that they offer. Here are some of the discounts and benefits of bundling with certain major providers:
Bundling your insurance policies doesn’t necessarily mean saving on them, so compare what you’re currently paying for coverage versus what you might pay after combining plans.
At the end of the day, trust your instincts. Does it feel like the right move at this time, discounts notwithstanding? Knowing your limits, exploring your options, and working with the right insurer are key to deciding if bundling insurance is worth the savings.
Pat Howard is an Insurance Editor at Policygenius in New York City, specializing in homeowners insurance. He has been featured on Property Casualty 360, MSN, and more. Pat has a B.A. in journalism from Michigan State University.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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