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.