Should I Bundle My Car and Home Insurance?

The more you have to insure as you get older. It starts with your car, then your house, then your life, and so on.

These are all valuable assets that should be safeguarded, but the costs can quickly add up. According to the Insurance Information Institute, homeowners insurance rates in the United States increased by more than 45 percent between 2008 and 2017.

Home and auto insurance policies are two of the most common types of coverage, and finding the right policies can be an expensive headache. However, there is a way to simplify and save money by bundling insurance.

When you combine your home and auto insurance policies with the same carrier, you can significantly reduce your premium.

What is bundling?

Bundling insurance policies occurs when you group together more than one type of insurance policy from the same insurer. Most insurance companies will give you a bundling discount, also known as a multiline or multipolicy discount, if you do this.

Bundling discounts are offered for a simple reason: insurers want more of your business! If insurance companies can persuade you to combine your home and auto insurance policies with other providers, they will receive a higher monthly premium from you than they would for just one policy, even if it is discounted.

Typically, providers will allow you to bundle any policies they offer. The most common insurance bundles are car and home insurance, but many insurers offer discounts for combining renters and car insurance policies, as well as combinations of life, boat, RV, and other specialty insurance offerings.

Savings for bundling insurance policies can vary — and usually increase as you bundle more policies — but typically range between 10% and 25%. Most companies advertise percentage savings, but the best way to find out how much you can save is to get a few quotes and compare your bundling discount options.

Pros and cons of bundling home and auto

Pros 

• Discounts: More often than not, your insurance provider will offer you a discount of 10% to 25% for bundling home and auto insurance. Some insurers even advertise up to 29% savings on some policies when you bundle.
• Convenience: When you combine your car and home insurance policies — as well as any other policies — with the same company, you have one less bill to manage. Because the entire process is simplified and streamlined under one provider, you don't have to call different agents for insurance claims.
• Security: If you make frequent claims on any policy, you risk having your insurance company drop you. The more policies you have with the same provider, the less likely this is. If you have a history of car accidents, it may be a good idea to combine your auto policy with your home and life insurance to reduce your risk of losing coverage.
• Combined deductibles: When you bundle your policies, some insurers will even combine your deductibles. That is, a claim involving multiple policies would not be subject to multiple deductibles. A storm, for example, could easily cause damage to both your home and your car. In that case, a combined deductible could drastically reduce your out-of-pocket expenses.

Cons

• You may miss out on savings: Because combining policies with one insurer is easier, you may be less likely to shop around for the best rates. In some cases, getting a variety of home and Car insurance quotes and selecting the ones that offer you the lowest rate outright may result in lower rates.
• It might be less convenient than you think: Some insurers bundle policies through affiliate providers, which still gets you a discount but takes away some of the convenience of dealing with a single agent. When comparing home and auto insurance bundles, make sure to inquire about how you'll file claims for each of your policies.
• Your discounts may erode over time: Bundling insurance discounts are intended to foster loyalty, making it easier to set it and forget it. This may be convenient, but if you are not careful, your insurance provider can gradually raise your rates with each renewal, eroding your savings.

Compare home and auto bundles, by insurance company 

Tips for bundling home and auto insurance

Bundling is not created equal, and you may not always get a good deal. There are, however, a few things you can do to make the most of bundling car and home insurance. Here are a few tips:

Shop around

You'll never know if you're getting the best rates unless you shop around, whether you're bundling or not. Compare auto and home insurance quotes — both as individual policies and as bundled policies — to ensure you're getting a good deal.

Ask about affiliates

If you value convenience, don't forget to ask your agent about any affiliates or third parties who may be involved in your policy. It may not be worth your time and effort to combine policies for a small discount if you will not save time and headaches when filing claims.

Don’t bundle more than you need

Insurance companies always want you to buy more, and bundling discounts are a great way for them to do so. However, if you are fresh out of college with no dependents and a starting salary, that life insurance policy may not make sense. Only pay for what you require — and reevaluate those requirements on a regular basis.

Check in regularly 

Your insurance requirements, as well as your rates and potential discounts, evolve over time. Check in with your agent on a regular basis — and compare prices with other insurers — to ensure you're getting the best available premiums. Renewal is a good reminder to check in and make changes.