Insurance

Where do I start with insurance? Bundling

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There are a few types of insurance that just about all of us should have. Two of them are auto and home insurance. It doesn’t matter whether you own or lease your ride or own or rent your residence — insuring them is a smart move.

Many insurance companies offer the ability to bundle these two types of insurance. While bundling home and car insurance can lead to savings, it’s not always as simple as it looks.

Welcome to another installment of our “Where do I start with insurance?” series, which breaks down key insurance topics, terms and knowledge to help you make the best decision for you. This time, we’re looking at the options for insurance bundling.

So, is bundling home and auto insurance a good move? Here’s what to consider.

What is insurance bundling?

As the name suggests, insurance bundling is when you hold two types of insurance policies with the same company. Typically, you’ll bundle your home and auto insurance together, though certain companies may offer other bundling options. 

If you own your home, you’ll pay the least for car insurance. Companies tend to view homeowners as more financially responsible and, whether fair or not, less likely to file an auto insurance claim than a renter would. Depending on the company, you can save about 3% on your premiums (GEICO) all the way up to about 22% (Farmers).

Here’s a more in-depth look at how car insurance works for homeowners.

If you own a condo, you can still bundle those policies with your car insurance. It might just cost a bit more. With some carriers — like with GEICO, Progressive, State Farm and USAA — the monthly premium price difference between owning a home or condo is negligible.

The savings with renters are generally smaller — about 1 to 10 percent — but there’s still the opportunity to lower your premiums by bundling your renters insurance with your car insurance.

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Benefits of bundling insurance

There are ample benefits to bundling your insurance. Here’s a look at the main improvements you can expect.

Lower monthly premiums

The biggest benefit of bundling insurance is that you could save on your premiums. Discounts are always nice — imagine paying less on both your home and car insurance.

Depending on your type of dwelling, different companies offer attractive bundling options. Discover your best options below.

Best car insurance quotes for homeowners

Best car insurance quotes for condo owners

Best car insurance quotes for renters 

The power of convenience

Another sometimes overlooked benefit: convenience. Instead of having to communicate with two separate companies, you only need to interact with the one for both your home and auto insurance options. You can even ask your insurance agent to align your billing cycles so you can pay everything at once.

Additionally, most insurance companies now offer apps. Instead of going back and forth between two apps, you only need to download and know the ins and outs of one app. You can keep track of all of your insurance policies, file claims, see potential discounts and make payments in one place.

Perks from your insurance provider

You may be able to save even more by setting up features like e-billing or auto pay. When you’re looking at bundling possibilities, check with your insurer to see what other options are available.

Finally, your insurance company is less likely to drop you if you bundle your insurance. It’s easier to retain a current customer than acquire a new one. If you’re on both an auto and home insurance policy, that’s double the incentive to keep you.

Disadvantages of bundling insurance

While bundling sounds like an attractive option, it doesn’t come without potential risks. Keep an eye out for these possible roadblocks.

Those “savings” may not save you money

For starters, you may not actually save any money through bundling. Yes, most companies offer discounts for bundling your home and auto, but those premiums may still be higher than another company. 

Insurance companies offer bundling options because that means you’re less likely to shop elsewhere and compare prices. That’s great for the insurance companies, but less great for you. Companies may also raise their premiums over time, hoping that the smaller discount is offset by the convenience of having everything in one place. That's why it's important to compare insurance pricing regularly, to make sure you're not leaving money on the table. 

An inconvenient truth

That convenience of having coverage all with one company may not even happen, since insurers can bundle your policies with an affiliated company. For example, Nationwide has affiliations with dozens of other companies, such as ALLIED Group and Titan Insurance Company. 

It’s possible you could have your auto insurance under Nationwide and your home insurance under an affiliated company. In that case, the convenience factor disappears — you’ll still save by bundling, but you’ll have two logins and apps to worry about.

Your insurance coverage might change 

The final disadvantage of bundling premiums is perhaps the most important one: it may alter the type of insurance coverage you receive. Homeowners and car insurance companies have different risk analyzers, so when you bundle them together, certain events or behaviors could lead to higher costs or denied coverage.

For example, your dog is covered under your home insurance through your liability policy. At some companies, certain types of “aggressive” dog breeds, like pit bulls or German Shepherds, may be excluded or limited from your liability coverage.

Other elements of your home may impact your auto insurance liability, too. Things like a pool, trampoline or backyard playground all pose a risk, and it may negatively impact your coverage.  

Similarly, if you have a luxury vehicle or sports car, there are companies that cater specifically to insuring those types of rides. A company that offers home insurance may not extend coverage to that vehicle, or it may offer limited coverage.

As always, make sure to talk with any insurance company to learn what’s covered within your policy and see if there are any hidden surprises waiting for you.

What about multiple people on one policy?

You can also receive a type of bundling discount via a multi-policy discount. If you have a teen driver or college student under a separate auto insurance policy or connected under your parent policy, you may be able to bundle their policy with your homeowners policy and lower your premiums that way.

Check with your insurance company on any potential discounts to see what you could be saving.   

 

Can you bundle other types of insurance?

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Generally, the most common type of bundling is combining your auto and home insurance on the same policy. However, depending on your insurance company, there may be other opportunities to bundle.

For example, if you have a boat or an RV, you may be able to pair it with your homeowners insurance policy. Since an RV can sometimes be a home and sometimes be a vehicle, different types of insurance would cover it, depending on the situation.

You likely won’t be able to pair life insurance with your auto insurance policy or health insurance with your home insurance. But your insurance company may offer discounts for other forms of insurance.

 

 

Bundling your car and home insurance

In general, bundling your home insurance with your auto insurance can save you money on your monthly premiums and offer additional convenience on your policies. However, you should still compare insurance rates to see if you’re maximizing your savings, and be sure you understand any potential changes in coverage before committing to bundling.

Compare insurance rates quickly and easily.

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For additional information about bundling options, home and auto insurance, visit the links below.

Home and auto insurance bundles

Best renters and car insurance

The top insurance companies for 2021

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