Bundling home and auto insurance policies

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.

Why you should bundle your home and car insurance policies

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:

Bundling saves money

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.

➞ Read our explainer on homeowners insurance deductibles here

Bundling is convenient

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.

Unique product tiers

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.

You live in a high-risk home

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.

When bundling isn’t always the best option

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.

You have a high-end vehicle

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.

Your coverage may be reduced

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.

When it stops you from comparing policies

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.

How to bundle your auto and homeowners insurance policies

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.

The best home and auto insurance bundles

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:

Nationwide

• Home or renters and auto insurance discount
• Auto or home and life insurance discount
• Multi-car insurance discount
• Boat insurance bundle package

State Farm

• Multiple car discount (two or more cars insured)
• Auto bundled with homeowners, renters, condo or life insurance

Progressive

• Auto and homeowners bundle (with option to add other vehicles, i.e. cars, boats, motorcycles)
• If your car and home are both damaged by a covered hazard, you only need to pay one deductible for your home and car claims

Liberty Mutual

• Auto and home insurance multi-policy discount (with choice of combining auto with home, renters or condo insurance)

Allstate

• Auto and home bundle discount
• Auto and life insurance bundle

GEICO

• 25% multi-vehicle discount
• Home, renters, condo, or mobile home and car insurance discount

MetLife

• MetLife GrandProtect - a unique product tier that allows you to combine your car, motorcycle, and RV insurance with homeowners insurance for a discount
• GrandProtect puts all of your coverage on one bill, and you only have to pay a single deductible if a covered hazard damages several types of insured properties

Travelers

• 10% discount on your car insurance if you bundle your home and auto insurance policies
• Additional savings opportunities if you bundle your car and renters insurance, or if you buy other types of protection like boat, umbrella, or valuable personal possessions coverage

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.