Benefits of Bundling Insurance Policies

September 16, 2020

If you have ever shopped for insurance before, you have probably experienced an agent selling you on other policies at the same time. It makes sense, they want to make money and why not hit you up for other insurance policies while they are at it?

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Many companies will lure you in with bundling discounts. Who doesn’t love to save money, right? But is it really cheaper? We help you discover the answer below.

Incentives and Savings Usually Occur

Generally, yes, you can save money off a particular insurance company’s standard rates. If you have say, homeowners insurance, and auto insurance with the same company, they will likely give you a discount. So it looks like you are saving money. But, there’s a catch.

Did you shop around at other agencies as well? How do you know you are really saving? You are saving on the standard premium of one particular company. What about the other companies? Unless you shop around for each type of coverage you need, you won’t know if the discount is really worth it or not.

However, some insurance companies offer incentives that make it worth bundling. If, for example, one company allows you to pay only one deductible if a singular event affects multiple items, it could be saving to you. But, again, you need to see just how much you are actually saving before deciding.

Lower Premiums on Insurance Policies May Exist

As we discussed above, if you just stick with your current insurance company because they offer you a discount, you won’t know what else is out there.

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Let’s say you need auto insurance but already have homeowners insurance. You should shop not only at your current insurance company, but also smaller companies that offer just auto insurance. These companies may specialize in auto insurance and be able to offer much lower rates. Companies that have their hands in many different baskets are unable to provide the same discounts. They have to cover themselves in too many areas, making it harder to provide as great of savings.

Other Benefits of Bundling

Besides the money you may save, there are non-financial benefits of bundling insurance that may help you make your decision.

  • Convenience – If paying bills to different companies each month seems too confusing or time-consuming, the convenience of bundling may be big to you. You only have one insurance company you have to deal with when you have a claim as well.
  • Proper coverage – An insurance company that holds all of your policies knows more about you. They may be able to suggest other types of coverage or help you know how much coverage you need for each policy. This could help you save money rather than paying for coverages you don’t need because policies overlap.
  • Keep lower premiums – Sometimes, keeping all of your policies with one company can help your premiums stay stable even after you file a claim. If you only have one type of insurance with a company, they may not hesitate to raise your premiums. If you have several though, they will work harder to keep your business as losing more than one insurance coverage could be detrimental to them.

It’s important to look at the big picture when determining whether bundling insurance policies is worth it. You might save money, but you also might not. You have to shop around and see what insurance companies say about your individual factors. Only then can you decide what is right for you. Shopping around for insurance every few years should also be a part of your routine as you may find lower rates as you shop around.

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