Insurance bundling simply means buying your home insurance and auto or other coverage from the same company. Bundling insurance policies can have some advantages; most notably, potential savings on your overall insurance costs. It can also simplify your bill paying and record keeping. But bundling doesn’t guarantee savings, and it may not be the right choice for you. We’ll explain why below, along with how bundling works, the advantages and disadvantages, and the potential pitfalls.
What Is Insurance Bundling?
Purchasing more than one insurance policy from the same company is a common practice known as bundling. It can sometimes save customers money compared to buying homeowners and auto or other insurance policies through different companies. More formally known as a multipolicy discount or multiple line discount, insurance companies encourage bundling as a means of saving money on your overall bill. Most insurers advertise savings of between 10% and 25% when bundling two or more policies, compared to what they would charge for each policy individually.
Insurance companies like bundling as a way to generate additional revenue from the same customer. Research has also indicated that customers who bundle policies tend to stay with the same company longer.
If you’re buying your first home, bundling is especially worth considering. It’s also an excellent time to review all your insurance needs and get competitive quotes from several companies, especially if you haven’t reviewed your auto policy or other coverage in a year or more. As your situation changes over time, it’s important to make sure your insurance keeps up.
A good place to start is by seeing if you can get a better rate with your existing insurance company by adding a homeowners policy – just make sure you get competitive quotes from other providers first. You might end up switching to another company with lower overall rates, or you may be able to use a lower quote as a negotiating tool with your current insurance company.
While you’re getting quotes, think about all your insurance needs and consider any changes or updates you want to make to all your policies. The more types of insurance you bundle, the more money you may be able to save. It’s possible that not all insurers will offer all the coverage you need, so focus your search on companies that do.
Bundling insurance has other advantages, like allowing you to track and update your policies through one company website or app. It can also simplify paying your bills.
Finding a company that will give you the best discount will probably require some research, and rates will vary depending on the types of coverage you need, your location, your credit status, your claim history, and other factors. It’s worth doing your own research online, because everyone’s situation is different. Just because a friend or relative gets a good rate with one company doesn’t mean that you will.
Does Bundling Insurance Save Money?
There’s a good chance you will save money by bundling your home insurance with another policy such as your automobile, boat, RV, or life insurance. Your specific savings will vary, depending on where you live, how many policies you bundle, your credit rating, your claim history, and other factors.
Every homeowners insurance company in our rating advertises some kind of bundling discount for combining two or more policies, with websites touting savings of anywhere from 5% to 25%. Allstate, for example, offers savings of up to 25% when you bundle home and auto insurance. Amica advertises discounts of up to 20% when you combine homeowners insurance with policies for auto insurance, and up to 30% for combining home with auto, condo, life, or umbrella policies.
Other providers, such as USAA, reference an average savings rate of 10% overall for bundling home and auto policies.
But all insurance companies include caveats about individual discounts, and not all insurers offer every type of coverage in all states. The only way to know how much you might save is to get quotes from several companies.
Some insurance companies offer additional savings with reduced or consolidated deductibles when you buy more than one type of policy. If your home and boat are both damaged by a hurricane, for example, some insurers may only charge you the deductible for your home and waive the deductible for your boat.
Remember that discounts advertised on websites represent the most you might be able to save. Chances are your savings will be less. Depending on your claim history, location, type, and amount of coverage, you may not see any savings at all.
Is Homeowners Insurance Bundling Worth It?
Bundling your homeowners insurance with an auto, boat, or other policy can potentially save you hundreds of dollars per year compared to buying a separate policy for each. Insurance companies in our study typically advertise savings of between 10% and 25% for customers who purchase more than one type of policy. If you have more than one vehicle or combine additional policies for RV, boat, or life insurance, the savings could be even greater. The more policies you bundle, the more you stand to save.
Another advantage to bundling is that sticking with one company can simplify bill paying and record keeping, with one insurer responsible for all your needs and one agent to work with. You may save even more if a storm or other event simultaneously damages items covered by different policies, such as a boat and your home. Some companies may only charge you for one deductible in such cases, letting you recoup more of the overall loss.
But bundling insurance doesn’t guarantee savings. The only way to know whether your insurance cost will be less is to gather several competing quotes from different insurers. Many factors come into play; your rates will vary depending on your location, your claim history, your credit rating, and more. Not everyone will save by bundling their policies.
In some cases, an insurance company that offers only auto insurance may offer lower rates than companies that sell several different types of policies, according to Amy Bach of the consumer advocacy group United Policyholders. Bach says that a company that offers only auto insurance may also offer benefits not available in a bundle from another insurer, such as ticket forgiveness or claims-free discounts.
“Just because a company says it’s giving you a discount on combined home and car insurance, you might still get a cheaper price on auto coverage without bundling,” Bach says. “But you’ll have to shop around a little.”
How Does Homeowners Insurance Bundling Work?
An easy way to see if you might save by bundling your home insurance with auto insurance or another policy is to use the estimation tools available on most insurance company websites. By entering some basic information about yourself, your car, your home, and whatever else you might want to bundle, you can get a quick cost estimate. Try this out on several different sites to compare rates.
If the results look promising, talk to an agent or company representative to get more details. Most insurance company websites will let you set up a call with an agent. Take your time, review your options carefully, and don’t be afraid to ask detailed questions.
Also remember that price shouldn’t be your only concern. Choose a company (and an agent) you’re comfortable with: one that offers both a solid reputation for quality and service and has the coverage that you need.
Which Companies Offer Homeowners Insurance Bundling?
Many insurance companies offer discounts for bundling homeowners policies with another type of policy, including every insurer in our rating. For price quotes, contact each company.
Are There Any Disadvantages to Bundling Homeowners Insurance?
While bundling homeowners insurance with your auto insurance or another policy will probably save you money compared to buying different coverage from different companies, bundling is no guarantee of savings. Depending on where you live, your claim history, and other factors including your credit history and the type of coverage, bundling may not be your best bet.
An insurance company that only offers auto insurance might provide lower rates than you’ll get by bundling car insurance with a homeowners policy from another insurer. A separate auto policy might also include other benefits that are unavailable with a bundled policy, such as accident or ticket forgiveness.
It’s important to weigh your options carefully and look at the specifics of any bundle you’re considering. Before choosing any policy, make sure you understand the details of what you’re getting and what it will cost. An independent insurance agent can help you navigate the fine print included in policies and compare different companies.
There’s a lot more to learn about homeowners insurance, including how it works, what it covers, how to file a claim, and how to bundle homeowners with auto insurance to save money on both. For more on these topics, see the guides below.
Best Homeowners Insurance Companies of 2023
Cheapest Homeowners Insurance Companies of 2023
Best Home and Auto Insurance Bundles of 2023
How To Buy Homeowners Insurance
How Does Homeowners Insurance Work?
What Does Homeowners Insurance Cover?