What does it Mean to Bundle Your Home and Auto Insurance, and does it Save Money?
September 28, 2022 by Brad Davis, CIC
So, you are in the market for both Home and Auto insurance, and you want to know if you should bundle your insurance together. You may have seen multiple commercials telling you that bundling saves money, ads on social media, and maybe even friends saying to bundle your Home and Auto Insurance for the best deal.
Well, what does it mean to bundle your Homeowners and Auto Insurance together? And does it really save you money?
It may benefit you to bundle your insurance, but you really need to look at all the angles and options for your best coverage option. No two situations are the exact same, and an experienced insurance agent should be able to look at several options and explain them to you.
What does it mean to Bundle Your Home and Auto Insurance?
Bundling your Homeowners and Automobile Insurance can be done in two ways. By the way, you can bundle more than just Home and Auto. In many cases you can also bundle your Boat Insurance, Motorcycle Insurance, Umbrella Insurance, etc.
1. Captive insurance companies or companies that offer both Home and Auto Insurance say bundling is putting both policies with them (same carrier).
2. Davis Insurance Associates is an independent insurance agency, so we (and many other agencies) look at bundling as putting two or more of your insurance policies with our agency. This sometimes means putting both policies with the same insurance company within the agency or putting Home Insurance with one company and Auto Insurance with another company within the agency.
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Does Bundling Home and Auto Insurance Save Money?
Sometimes it does and sometimes it does not. I would venture to say more often than not you can find the lowest premium by bundling your Home and Auto Insurance with the same insurance agency, not necessarily with the same company.
With option 1 above it is pretty clear. The insurance carrier will almost always apply a discount to both the Home and Auto Insurance policies for having them together with the same insurance company. It benefits the insurance company to have multiple policies for the same policyholder, so they offer the discount as an incentive to bundle.
With option 2 an insurance agent can find a combination of Home Insurance with one company and Auto Insurance with another company and in many cases the companies still offer a bundle or multi-line discount for placing both lines of business within the agency.
It is common that some Auto Insurance providers don’t offer Homeowners Insurance and some Home Insurance providers don’t offer Automobile Insurance. Even though they may not provide both lines (or be able to provide both lines) they often offer the discount because it still benefits them for the agency to insure multiple lines to the insured.
Let’s look at an example…
An Example of how Bundling can impact Premiums.
Here is a real scenario with quotes that we provided to a customer not long ago.
Option 1: Home and Auto Insurance with the same insurance company. Multi-line discount applied to both quotes. Total Premium = $4,145.
- Home Insurance Quote from Company A - $2455. $1000 All Other Peril (AOP) deductible and 2% Wind/Hail deductible.
- Auto Insurance Quote from Company A - $1690/year.
Option 2: Home and Auto Insurance with different insurance companies within the agency. We are only able to apply the multi-line discount to the Home Insurance quote. Total premium = $3,753.
- Home Insurance Quote from Company B - $1911. $1000 All Other Peril (AOP) deductible and 2% Named Storm deductible.
- Auto Insurance Quote from Company A - $1842/year.
If you took the time to read these examples you see that even though option 2 is with different companies and the is no multi-line discount for the Auto Insurance, the overall premium is still lower. Also, the Home Insurance deductible is more favorable.
Link to information about the types of Home & Property Insurance we offer.
Pros of Bundling Home and Auto Insurance.
- If you have a good agent, you should have some peace of mind that they are better insuring you and not just one of your risks.
- It makes things simple having one contact. You may also be able to manage your insurance policies on one app.
- You will likely save on premium!
Cons of Bundling Home and Auto Insurance.
- If the agency you chose is doing a good job, there should not be any negative reasons to bundle your insurance. You can (and should) still reassess your coverage and policies every one to two years.
- One con maybe that you have a special type of risk where you need to go to a specialty carrier for coverage. An example may be that you own an aircraft or large yacht. In a case like that you may be better off insuring that with a specialty agency or company.
Link to our website about Auto Insurance.
Key Takeaways.
- Bundling can be a way to save big on premiums by using the same insurance company or the same independent insurance agent.
- Bundling with different companies within the same agency can be a way to save AND find coverage that fits you the best.
- A good insurance agent should be able to provide you this information and explain so it makes sense.
- There is more to insurance than just getting the lowest premium! I can’t stress this enough. Many policies look the same on the surface, but no two policies from different companies are.
- You can typically also bundle your Boat, Motorcycle, Golf Cart, Umbrella, RV, etc. with the same agency.
Are you ready to get quotes for your Home and Auto Insurance in South Carolina or North Carolina? Call (843) 213-0000 or visit thinkdavisinsurance.com.
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