Let’s face it. Insurance can be expensive. However, it’s also necessary. Having insurance is the law if you drive a car. It’s also required if you don’t own your home outright (and even if your home is paid off, why would you leave yourself without this vital protection?) It’s a good idea for boats, motorcycles and all recreational vehicles. There’s also no need to pay more than you should. Did you know that you can bundle your insurance products and save money on premiums? Let’s take a closer look.
What Is “Bundling”?
Simply put, bundling is combining two different insurance policies with the same insurer. Let’s say you have homeowner’s insurance with Company A, and auto insurance with Company B. Insurance companies want your business, and they’re willing to let you combine your policies “under the same roof” and offer lower premiums in the process. So, you’d essentially cancel your auto insurance policy with Company B, and take one out with Company A, in exchange for a reduction on the premiums for both insurance policies.
With that being said, different insurers go about the process of bundling policies in various ways. One company might offer a single discount across all the policies that you bundle (say 20%). Another might offer different discounts for each policy bundled together. It’s important to look at each potential bundling objectively to determine whether or not you’re saving the most money possible.
Financial savings are the primary reason for bundling your policies. However, there are other benefits, as well. For instance, suppose you’ve had an auto accident, or maybe you’ve added a teen driver to your auto insurance policy. Maybe you or your spouse were convicted of a driving infraction or you have an at-fault loss and your insurance rates have gone up as a result. By bundling your policy, you may be able to save enough to counter a significant rate increase.
If you have a claim that affects both your home and your auto policy you may be at an advantage if both policies are bundled with the same carrier. Take for example, if your car is broken into and the contents are stolen. The vandalism/damage to the car is covered under your auto policy and subject to the deductible. The contents are covered by your home policy (not your auto) and subject to another deductible. If both policies are with the same carrier, often the company will only apply one deductible to the entire loss.
Bundling also makes it simpler to compare your options when working with an insurance broker. You can sit down and discuss all of your needs when it comes to insurance, and find a combined/bundled policy that works for your needs and your budget. That also saves you a lot of time and hassle, as well.
When Bundling Doesn’t Make Sense
While there’s a lot to be gained by bundling your insurance policies together in most instances, there are times when it doesn’t make sense. For instance, you might find that you get a better rate on your homeowner’s insurance from one company, and a great rate on auto insurance from a second company, and that bundling would actually be more expensive. There’s also the prospect that you might be sacrificing coverage in exchange for saving a few dollars each month. Make sure that you’re comparing apples to apples (in terms of coverage) before you decide to bundle your policies together.Bundling can be a great way to save without sacrificing coverage, but the best option is to work with an insurance broker to find the right protection for your needs.