Is it Worth it to Bundle Insurance?
Insurance companies typically offer a discount if you bundle your insurance. This means getting multiple policies from the same agent. Typically, insurance companies offer the largest discount for auto and home insurance bundles, but it’s worth asking about other policies if you need them too.
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How Much Can you Save?
The big question is how much can you save? While each insurance company differs, on average, expect around a 5 – 25% savings. This is the savings on each policy. If your home insurance would cost $1,000, but you can get a bundling discount, you may save between $50 and $250. If your car insurance would cost $1,500 per year, you’d save $75 – $375.
Insurance companies like when you bundle policies because it means they make more money. Typically, insurance companies aren’t interested in writing just one policy. If they do, they often jack the prices up higher, making bundling insurance policies that much more attractive.
How do Insurance Companies Benefit from Bundling Policies?
Here’s the thing. Insurance companies do benefit from bundling policies, but if you are careful, you’ll protect yourself. When you bundle insurance, it’s easy to just leave it. Every year, the policies renew, typically at a slightly higher premium. You may or may not notice. But with multiple policies with the same company, you are likely to leave the policies rather than shop around.
Keep in mind, not all insurance companies automatically increase their rates. Just pay close attention at renewal time. Read your renewal documents and determine if your premiums increased. While a slight increase is normal – the cost of living increases every year, a large increase may not be necessary.
How do You Benefit from Bundling Policies?
We already talked about the benefits of saving money. That’s the largest benefit for most consumers. But, what other ways do you benefit?
- Convenience – Let’s face it, no one likes to shop for insurance. If you can get multiple policies with one agent, it makes life much easier. If you have questions, you know exactly who to call. You have one online log in and have to spend less time managing your policies.
- Relationships – Insurance is important as it saves you during some of the most stressful times. Building a relationship with your agent helps make things easier. You can talk through the issues and feel comfortable about doing so.
- Easier qualifications – Insurance is risky. Insurance companies have to decide if they want to protect you or not. If you bundle insurance policies, companies are more likely to give you the policies you need rather than if you only had one policy.
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What to Look for When Bundling Policies
If you decide to bundle your insurance policies, consider the following:
- Check your policies at least every other year. Look at the premiums. How much have they increased? If it’s more than 10%, you may want to shop around.
- Check your credit. Has your credit score increased since the last time you got insurance? You may want to see if you qualify for lower rates. Some states base insurance rates on credit scores, while others don’t. It’s worth checking.
- Look for policies three years after receiving a moving violation – Your rates may increase for the first three years following the violation, but at that 3-year mark, you should be able to secure lower rates.
No matter when you are looking for a bundled policy, always read the fine print. Know the coverage and coverage amounts. Make sure they are adequate to meet your needs. Also, look at the savings. Price policies separately and bundled with several agents. This way you’ll know whether or not bundling is a good idea.
Bundling insurance should save you money and be more convenient, but each insurance company operates differently. Interview different agents, ask a lot of questions, and know beyond a reasonable doubt that you are getting the coverage you need for any policies included in the bundle.
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