There are various ways to save money on insurance expenses. Most people need more than one kind of insurance. So, when buying multiple policies why not attempt to save some money? Known as bundling insurance policies, you may be able to do so when purchasing more than one insurance policy from the same company.
What Does Bundling Insurance Policies Mean?
If you buy two or more insurance policies from one company and obtain a discount on your purchases, this is known as bundling. Most insurance companies will allow you to bundle insurance policies for auto, boat, condo, homeowner, motorcycle, RV, or renters among others. They may even allow you to include life insurance policies or travel insurance.
Companies will offer you a discount when you bundle, however, the discount will vary from company to company and depend on which kinds of insurance you are acquiring.
Can I Save Money if I Bundle My Insurance Policies?
The principal reason that insurance providers offer bundling discounts is to retain your business and a bigger portion of it. Clients that have more than one policy with a company also appear less inclined to switch providers.
Not every bundling discount will be the same and may depend on where you reside and when you purchase. Expertinsurancereviews.com cites discounts somewhere between 5% and 25%, when bundling home and auto insurance.
Consider that if your primary insurance policy is for your car, your secondary policy, in this case, homeowner coverage should receive a discount as well. Sometimes, it is a discount on the secondary policy that makes bundling attractive. Homeowner insurance can be quite expensive, hence a good discount on the secondary policy can make bundling worthwhile.
However, purchasing car and home insurance together will not automatically mean your auto coverage payments will be less. Much depends on your situation and the company you are dealing with. Discounts are only one factor that affects how much you pay.
Another aspect that merits attention is the cost before the discount. The starting price may be significantly higher than those of other competitor providers meaning the discount merely brings the premiums into the range of the undiscounted prices of other insurance companies.
Saving Money on Insurance
The best way to save money on insurance is to engage in comparative shopping. If you make saving money a goal, get several quotes from a minimum of three insurers in your area.
Be prepared with a list of everything you want to be insured and request the prices with and without a discount or bundling. Then compare the offerings making sure coverage is comparable, together with price, and any discounts available.
Auto insurance is often more expensive than other coverage depending on where you live, the vehicle year and model, and your driving history. It might be wise to start your search for a potential bundle with your auto coverage, compare the cheapest car insurance companies, and move on from there.
If discounts are only a few percentage points, it may not be worth it to bundle with only one provider. Also, before switching, make sure that none of your policies are significantly more expensive than what you currently have because this may cancel the effect of what you save bundling.
To justify bundling, an insurance provider must offer the best overall prices as opposed to individual policy costs.
Are There Other Benefits to Bundling Insurance Policies?
While saving money is the primary objective when bundling insurance, there are several other advantages to consider.
You can save time.
Having a single agent or company to deal with can save lots of time when paying premiums or making claims. You’ll be able to access coverage details and billing information from one account and one website.
Your coverage may improve.
If you bundle your policies under one provider, you may obtain more customized coverage as well as a deductible valid for all your policies, which may translate into increased savings.
You may receive more loyalty benefits saving even more money.
If you continue to renew your bundle, you may be given more discounts for your loyalty, ultimately increasing your savings.
Are There Any Drawbacks to Bundling Insurance Policies?
Potential savings and convenience are undisputed, but there may be a few other things to reflect upon before deciding.
- Bundling makes it easier for providers to gradually increase rates while discouraging shopping around. At renewal time, rates usually increase, and if you renew automatically, you may forgo savings that you might get by switching to a competitor.
- You’ll have less flexibility when choosing and probably fewer choices.
- Customer satisfaction may be rated differently depending on the policy. A company may have excellent customer service for auto insurance claims and be mediocre when responding to homeowner claims or vice versa. When engaging in comparative shopping, don’t limit your comparisons to cost and coverage.
- Auto insurance may not save that much through bundling, especially if you are insuring a collectible or vehicle that is more difficult to insure. You might be able to pay less by not bundling car insurance in some instances.
It’s worth noting that combo insurance, perhaps indicated as a kind of bundling, isn’t the same as bundling. One or more of your insurance coverages might be with a partner firm, so you aren’t able to select or deal with only one insurer.
Can You Save Money by Bundling Insurance Policies?
If you bundle your auto and home insurance policies, you may be able to save between 5% and 25%, but bundling isn’t limited to car and home coverage, so there may be other savings to be had.
Bundling also offers convenience when managing your coverage both for payments and for claims. But convenience isn’t the entire story. Insurance costs are based on the individual and are determined by where you live, the value of what you are insuring, and your credit history among other factors.
If you find an insurance provider that offers the coverage you need at a discounted bundling price and has positive customer service reviews, you may find everything you want through bundling and at a significant discount. But come renewal time, it’s worthwhile to re-evaluate.
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