UPDATED: APRIL 27, 2023 | 1 MIN READ
The answer to this question is yes – to an extent. Most insurance companies will offer discounts for bundling home and auto policies. However, it’s important to still shop around yearly for the best deal.
What does it mean to bundle home and auto insurance?
When you bundle your insurance policies, you’re getting more than one insurance policy from the same insurer. This is most common in auto, homeowners, renters, and life insurance.
For the insurance company, there is no downside to offering discounts for customers for buying multiple policies. But policyholders need to be aware of the conditions of buying more than one policy to ensure they have the best deal possible.
Let’s take a moment and look at the advantages of bundling for consumers
Bundling your insurance is a cost-effective way to purchase new policies. You’ll multi-policy discounts of around 5% – 25% off “rack rates,” though this will vary depending on the specific policy. More significant discounts usually apply to homeowners’ policies, as opposed to auto coverage, as they are typically more expensive to begin with.
Insurance agents often offer bundling, which can save you time. You can bundle services from different providers in one office visit or over the phone. They also research the packages, so you don’t have to try and comparison shop online.
Bundled products are great for customers who want to manage multiple policies with the same insurance company. For instance, if you manage your home and car insurance policies in one place, you can bundle your policies. This type of product will allow you to set the terms and conditions for both policies so that they are managed in one place, for example, on one web portal or app.
Suppose you are facing cancellation because of a lead foot or mishaps. In that case, having other policies with the same company can also be helpful. That way, if there is an auto policy claim or points on your license, you may not be canceled like someone without any additional policies.
For the insurance companies:
- Consistent with most sales organizations, the most cost-effective tactic is selling the benefits of bundling to an existing customer rather than trying to find a new one. This lowers the cost of acquiring a new customer by half.
- Customers with more than one policy are less likely to shop around at renewal time. This is key to the profitability of the discounts. The fewer customers shop around at renewal time. The more profits are maximized compared to possible revenue lost by giving discounts.
Price optimization is a strategy that insurance companies employ to make more money. This involves increasing the premium by a small amount every year. Optimal pricing means bumping the premium slightly but not so much that the customer will start comparison shopping. Over a few years, your bundle discount will be higher than buying individual policies from competitors.
So, is bundling a good thing or not?
Which companies offer bundles for home and auto insurance?
Several different home insurance companies and car insurance companies offer bundled discounts if you buy the two together.
These include, but are not limited to:
- USAA
- Progressive
- State Farm
- Nationwide
- Allstate
- GEICO
Tips for better bundling
In most cases, you will save by bundling, at least initially.
Homeowners who get the most significant break are those who currently have costly home insurance and cheap car insurance. The “bundle” package offers bigger discounts on homeowner insurance. Consequently, switching to this package is one of the best ways to make your monthly bills more manageable and affordable.
On the other hand, if you have a Mustang GT or Dodge Challenger Demon, bad credit, or a less-than-stellar driving record (with multiple insurance claims). Going with the new ‘discounted’ bundled auto insurance may be more expensive. You can get a cheaper insurance policy on your car by shopping around.
Your ultimate goal is to save money on your insurance policies. Meeting that goal is going to require some effort on your part.
If you have an independent insurance agent, you have a leg up.
He or she knows your local market and the insurers’ underwriting requirements. An agent represents the best interests of their clients by finding the cheapest and most suitable policies and packages. The agent also advocates for their client to get the best possible rates and coverage.
If you go solo, use an online marketplace like AgileRates.
This can help you compare home and auto quotes to find the cheapest policies with the coverage you need. Get the most affordable individual policy(s) first, then go back and see what bundled rates are available for them. With this exercise, you can see how the price of two separate policies compares to the cost of bundled packages. When the price for both policies is lower than the price of a package, there is no reason to buy a bundle.
Recheck prices before renewal.
Is a bundled package still the best option? We recommend you go through this exercise at least a month before renewal. If your package runs true to industry prices, it will go up a few dollars at renewal. It might not be worth the hassle to change policies straight away. Still, after three or four years of price optimization, you could pay more than double what you initially did.
FAQs
Do you actually save money bundling home and auto insurance?
Yes, usually, you can save money bundling home and auto insurance. You may find that the cheapest policies from individual insurance providers still work out better.
How much can you save when you bundle home and auto?
Typically, you can save between 5% – 25% on your policies by looking into insurance quotes for both types of insurance coverage simultaneously from the same provider.
Is it good to combine homeowners insurance and auto insurance?
One of the benefits of combining homeowners insurance and auto insurance policies is that you have everything under one provider instead of different companies. You’ll often save money on your overall insurance rates too. Some companies offer a discount if you opt for multiple products from one company rather than purchasing across several companies.
What does bundling insurance mean?
When you bundle policies, you purchase two or more policies from the same provider, usually around the same time. This doesn’t have to be a homeowners or auto insurance policy but can include different types of policies, such as renters and life insurance.
Is bundling a good idea?
Sometimes, it may not be a good idea to bundle insurance products. This includes if the insurance costs less when bought individually. As well as looking for bundle quotes, you should look for the best home and auto policies. Then compare the rates you get individually with the bundle options and choose the best rate for your needs.
How to bundle insurance?
To bundle insurance policies, you must purchase more than one policy from the same provider. Often, they’ll offer you discounts on your quotes, meaning that you save money overall.
How much does it cost to bundle?
Bundling insurance can provide discounts on your insurance premiums. Sometimes, you may not save money, so always shop around to double-check your bundling options.
How to Bundle Your Home and Auto Insurance
It’s important to remember that lower rates don’t always mean that you’re getting the best deal. As well as price, there are many other factors to consider when looking at car insurance quotes and home insurance policies. Check that the deductible is one you can afford and that the policies offer all the coverage you need.
Finding the best deal takes some work. AgileRates can take that load off your back and, more importantly, be your one-stop source for all your insurance needs and questions. Fill out our online rate form, and lets us make this process quick and easy!
