Buying two or more insurance policies - such as your homeowners and car insurance - through the same insurance company is known as “bundling.” Bundling saves you money through a discount, which is applied to both policies. This is referred to as a “multi-policy discount” on your policy declarations page.
Besides being less expensive than having separate insurance policies, bundling has other benefits, namely less hassle. By dealing with only one insurance company, you can manage your policies more easily and through the same online portal or agent. You can also identify any gaps in your coverage and combine your renewal periods and payment dates.
Depending on the insurance company and where you live, there are additional benefits to bundling. For example, Safeco offers some customers who bundle a single-loss deductible. So if your car is damaged in the same event that damages your home (like a flood, for instance) your car deductible is waived after your homeowner’s deductible has been paid.
How to tell if bundling is right for you
While bundling your auto policy can give you a discount, it’s not always the best choice. You may be able to get lower auto and home rates by buying policies with two separate insurance companies.
58% of people bundle their car and home insurance policies, according to the J.D. Power and Associates U.S. National Auto Insurance Study. To see if you should join this percentage, compare car insurance rates with and without bundling.
The discount given for bundling policies varies among insurance company. On average, savings from bundling auto and home insurance policies with a single insurance company (in the U.S.) averaged about 7.7%. For bundling auto and renters insurance it was 4.9% (according to data compiled by Quadrant Information Services for Insurance.com).
Insurance companies sometimes give a discount on both policies instead of just one lump discount. Travelers discounts up to 13% off your car policy and up to 15% off your home insurance when you bundle the coverages. Bundling can also help offset other costs. For instance, car insurance for teens is expensive, so if you are adding your newly licensed teen driver to your policy, definitely consider bundling to help mitigate costs.
Part of the reason that insurance companies offer these discounts is that they make a profit off two policies and part of it is that customers who bundle are seen as more likely to renew their policies. Insurance companies also know that homeowners file fewer claims on their auto insurance policies.
Other types of insurance that can be bundled with home and car insurance
There are other types of insurance you that you can add to your car and home insurance policy to get cheaper insurance rates overall:
Although some car insurance companies don’t offer homeowners insurance, some may align themselves with a home insurer to offer a discount. You should always ask your agent or customer service representative to see what’s available.
Car insurance companies that bundle
Many companies are able to bundle home and auto insurance policies, such as Progressive, Safeco, and The Hartford, to name just a few. Give Insurance.com a call at 855-430-7751 to hear about quotes from these and other providers.
This article is adapted with approval from carinsurance.com: http://www.insurance.com/auto-insurance/home-and-auto-insurance-bundle.html
This article originally appeared on YourMechanic.com as How to Bundle Your Car Insurance and Homeowners Insurance and was authored by Emily Edwards.