Bundling Home and Auto Insurance: How it can save your money?

by | Sep 6, 2022 | Finance

One look at the auto insurance rates and you’d understand that finding a low-price car insurance policy is not an easy task. With the rate of car accidents always on the rise, the rate of auto insurance will follow suit. But not everything is grim and expensive when it comes to insuring your cars. There are ways you can save a considerable amount of money. 

While the types and number of discounts an auto insurance company offers depend, most insurance companies want you to get all of your insurance policies from them, if they are offering. An average American can have dozens of insurance policies, such as home insurance, car insurance, life insurance, renters insurance, etc. In this article, we’ll look at the benefits of bundling home and auto insurance policies and how much they can help you save. 

What is Bundling? 

When it comes to insurance policies, it is like the wheels of a car; you always need more than one. In the case of car insurance policies, you need liability insurance, collision insurance, comprehensive policy, personal injury protection, uninsured motorist coverage, etc. Buying all these policies can cost you a lot. 

Along with a car insurance policy, you might also need a home insurance policy. So what is bundling? If you get two different types of insurance policies (such as liability insurance and home insurance) from the same insurer, it is called bundling of insurance policies. 

Let’s look at the facts. It is not mandatory to have a home insurance policy. If you own the home, you can choose whether to have a home insurance policy or not. But banks do require you to buy home insurance in the conditions for the mortgage.

Coming to the roads, almost every state requires you to buy liability insurance to drive a vehicle legally, while 12 states require you to buy a personal injury protection plan, and 14 states require you to carry uninsured motorist coverage. The point here is that you need to buy all these policies. So why not bundle them and save some money in the process? 

How Bundling Saves Money

When you need to buy two or more different types of insurance policies, like home insurance and car insurance, for example, you qualify for multi-policies discounts. Insurance companies want people to buy more policies from them, and to incentivize it, they offer discounts if you get two or more policies from the same company. 

But the discounts and other offers depend on the state. Some states might get you a lot of discounts while others won’t. Always look for insurance companies that offer multiple policies at a great price in your state. For example, if you live in California, then search for top car insurance companies in California and select the company that suits you the best. 

How Does Bundling Work? 

Let’s say that you select an insurance company that offers great car insurance policies as well as home insurance policies. All you need to do is contact the insurance agent and ask if they offer multiple policy discounts. If yes, then buy both home insurance policies and car insurance policies from the same company. 

Many companies offer bundling benefits irrespective of when you get the other insurance policy. For example, if you already have bought home insurance from one company and decide to buy a car insurance policy later, you’ll still get the bundling discounts the moment you buy other policies from them.

Even if you currently have auto insurance and home insurance from another company and decide to switch, you can still get bundling discounts as long as you have two or more insurance policies from the same insurance company. 

How Much Can You Save? 

Auto insurance and home insurance bundling is the most common bundling option. Almost every insurance company offers it. But how much can you save if you decide to get multiple policy discounts? The number varies due to different policy bundling and the state you live in. 

While the numbers can vary, you can expect anywhere between 5% to 20% off on the total cost of the insurance policies if you bundle them. Generally, the norm is the more policies you bundle, the more you save. Contact your insurance agent or the insurance company to get the details. You can also get a quote almost instantly. 

When Not to Switch

Bundling insurance policies will certainly save you money, but it is not always the right thing. Getting multiple policies from the same insurer does help in managing the policies better, but if you want to save a lot, you need to look at individual discounts. 

Let’s say that one company is offering you a home insurance policy at a much lower rate but another company is offering auto insurance policies such as liability insurance or collision insurance at better rates than the other company. In situations like these, it is better to get policies from two different insurance companies as that would help you save more. 

Some auto insurance companies offer better prices for people with a poor driving record or with traffic violations such as speeding tickets, DUI charges, rash driving, etc. So instead of getting 5-10% off by bundling home insurance and car insurance, choose the insurance company that offers a much higher discount range. 

Another important thing to note is no-claims bonuses. If you have a car insurance policy and haven’t made any claims during the policy period, you are eligible for no-claims bonuses which include discounts ranging from 15% to 30%. Ask your insurance agent about it and if you have the discounts, then avoid switching insurance companies. Saving matters, but you should focus on smartly saving more.  

Read through our useful guide for more information

Let us get you started with your own self build