January 30th, 2014
Whether you rent or own a home or have your own vehicle, you are going to need insurance policies to cover your assets. When you buy a homeowners insurance policy or are shopping car insurance companies, an agent will likely ask if you are interested in buying more than one type of policy. For a lot of insurance shoppers, combining or bundling two or more types of insurance coverage can offer a lot of benefits and savings.
What you can save by bundling
Bundling simply means that you are getting a package deal on different types of insurance. If you buy your car insurance policy with one company that also offers other types of coverage, they will likely want to get your business for other areas of your life as well. In order to get you to buy another form of insurance or another policy, companies will often offer bundling discounts.
How much you can save will depend on the company and policy, but in general you can often reduce your rates by hundreds of dollars per year. In addition to saving on premium costs, you can also sometimes get a combined deductible. For example, if your car insurance policy has a $500 deductible and your homeowners insurance has a deductible of $1,000, you could probably get the two combined for just $1,000. Instead of paying two deductibles, you will have one that is typically lower.
Not all insurance companies are alike, and if you've shopped around, you might know that some offer lower prices but don't have great customer service. When you find a company that can provide you with the best prices and service, it can be a good idea to stick with them for all your insurance needs. This is not simply because it can be cost effective, but also because it is often easier for monthly payments and filing claims.
With bundled policies, you will receive just one monthly bill to pay for however many types of insurance you have with that company. This can streamline the billing process and make it less likely that you will miss or make a late payment.
When it's not a deal
While many insurance companies will discount premiums with combined or bundled policies, there are some instances when it can be better to go with different sources for coverage. There are some companies that specialize in auto insurance and therefore can offer a lower monthly rate. Insurance agencies that offer multiple types of coverage by comparison may end up costing more. However, you should also weigh what type of service you are seeking in addition to finding the lowest price.
Before you make any decisions about bundling your insurance policies, be sure to take the time to shop around. Don't be afraid to ask insurance agents about bundling discounts when you buy more than one type of policy. Be sure to check that your rates won't go up over time as well.