If you’ve got a home or a car, chances are you’ve heard about bundling your home insurance and auto insurance. Maybe you’ve even heard that bundling can help you save money on your insurance. But is that true? Should you bundle your home insurance and auto insurance? It almost sounds too good to be true. We’ll tell you what bundling is, the reasons for bundling, and some things you should check before you make your final decision.
What is bundling?
Insurance has a lot of funny words.
In the world of insurance, bundling means getting multiple types of coverage from the same company. Usually, it refers to getting home and auto insurance from the same carrier.
The benefits of bundling.
There are a few reasons you may want to consider bundling your home and auto insurance:
1. You could get a discount on your premium.
One reason to give some thought to bundling is the potential savings. Some insurance companies will give you a discount if you get home and auto insurance from them. They appreciate the fact that you’d buy more than one product from them. Keep in mind that each company offers a different percentage of savings (not to mention offers different quotes) so you’ll have to do some price comparison.
Yes, there could be a discount for bundling, but does that mean you’ll get a better rate than you would from finding the lowest price for your home and auto individually? That’s the question, and it really depends on your particular situation. We’ll revisit this debate a little later.
2. It allows you to deal with only one insurance company.
Bundling can be convenient. Since you’re only dealing with one company, it might be easier to manage the two different lines of coverage. For example…
- You may be able to pay for both home and auto insurance on the same bill.
- You might be able to file a single claim if you have a loss that affects both your home and your car, such as a severe storm.
As we’ve mentioned before, each company is different. So, you’ll have to look into bundling at each carrier you’re considering to see how they handle billing and claims.
3. There might be a single deductible requirement for claims.
Indulge us in a brief moment of Insurance 101.
Your deductible is the amount of money you agree to pay towards a claim. You pay your deductible and insurance covers the rest of the claim – well, up to your policy’s limit. For example, if your deductible is $1,000 and you file a claim for $7,000 the insurance company pays $6,000 and you pay $1,000.
Okay, that concludes Insurance 101.
Anyways, both your home insurance and your auto insurance have their own deductible. If you bundle, your insurer may have a single deductible requirement. That means that if you have a loss that causes damage to both your home and your car, you would only have to pay one of those deductibles – not both. (Now, you’ll probably have to pay the higher one of the two, but still.)
At any rate, you should check and see if the carrier you’re considering has a single deductible requirement.
4. You might be able to bundle renters’ insurance and auto insurance.
Even if you don’t have home insurance, you still might be able to benefit from bundling when you purchase renters’ insurance. Now, the savings might not be quite as substantial as you’d see with home insurance because home insurance is more expensive, but still – it’s worth looking into.
Bundling Pro Tips:
Now, bundling is all fine and good, but we’ve got a checklist of sorts of things to keep in mind.
1. Check the limits of coverage and make sure you have enough insurance.
You need to check that you have enough home and auto insurance to fully protect you. What limits of coverage do you want on each policy? What coverages does each policy offer? You’ve got to make sure you understand what’s covered and what’s not covered.
With home insurance, the goal is to have enough coverage to completely rebuild your house (including clean up and construction costs for the build) replace all of your belongings, and manage your liability risks. With auto insurance, it’s important to have enough coverage to cover all the expenses associated with an accident (including your liability and repairing or replacing your car.)
2. Make sure both lines of coverage come from the same carrier.
Sometimes when you bundle, the carrier will go through a third-party company to get one of your coverages. Technically your insurance is still bundled, but it could cause you to be dealing with two insurance companies again. The “convenience factor” might be severely depleted.
3. You should shop around to get the best rate for your insurance.
Odds are that bundling will help you save on your insurance and that the discount will make it worthwhile. However, everyone’s insurance situation is different, so you’ll need to do some shopping to make sure that bundling will provide the best coverage at the best rate. For some people, it’s still less expensive to get home and auto insurance separately.
Pro tip: When you get insurance quotes from different carriers, make sure that you’re comparing the same levels of coverage, limits, and deductibles. You don’t want to think you’re getting a great deal only to find out you’re comparing apples to oranges.
Bonus pro tip: Don’t sacrifice coverage for the sake of getting a better price.
If you want to put that last tip into action, our team would be happy to help. Our agents are experts at helping homeowners and car owners save money on their insurance and get the coverage they need. To get in touch with us and get some quotes, all you have to do is fill out our online form or give us a call.