Bundling Insurance

It is common practice for many people to stick with the auto insurance carrier their parents had, simply because it was the most convenient option when they were teenagers.

However, once you enter adulthood, you'll need other types of coverage, such as home and life insurance. When you purchase these types of insurance, you might find yourself stuck with a stitched-together mess of policies, provided by several different insurance companies. This is not ideal when it comes to making bill payments.

This is where bundling your insurance may be beneficial for you.

Why Do Insurance Companies Bundle?

Signing clients to multiple policies is extremely valuable to insurance companies. Did you know it can cost about six times as much money to attract a new customer than to keep an existing one? Therefore, it's in the best interest of insurance companies to do all they can to maintain their existing client base.

While insurance companies definitely benefit from combining your auto insurance with renters, homeowners, and/or life insurance, YOU will see some advantages as well.

Advantages of Bundling Insurance Policies

The primary advantages of bundling auto insurance with other policies are:

  • Financial.
    • When an insurance company has most of your business, it's likely you'll be offered discounts, usually allowing you to save 10 to 20 percent on a multiple-policy bundle.
  • Forgiveness.
    • Your insurer may be more forgiving if you need to make multiple claims in a relatively short amount of time. Experts note that your insurer is less likely to drop your coverage if they have a considerable amount of business from you.
  • Convenience.
    • Rather than having to keep track of multiple due dates and billing amounts, bundling lets you pay one bill, one time. Less stress and less time spent on bills certainly has value of its own.

Potential Disadvantages of Bundling Your Insurance

Though it may seem like everyone could benefit from a multi-policy bundle, there are some instances where it may not be your best option.

Bundling your insurance may not be too beneficial if you:

  • Already have minimal amounts of coverage in separate policies—you may not save that much more by combining them with one company.
    • Usually those who pay the highest premiums stand to save the most from bundling.
  • Have special insurance requirements, such as family heirlooms or solar panels on your home.
    • If you're unsure, ask your insurance agent for individual and bundled quotes to compare.
  • Live in a state where insurance agencies have strict eligibility requirements.
    • Be sure to thoroughly research any eligibility requirements, consequences of long-term commitments, and potential policy loopholes before agreeing to a rate.

For many, bundling insurance policies can save time and money. However, it is important to do your research and shop around before making your final decision about whether this is the best strategy for you.