Home Owning and Car Insurance

If you own a home, it's possible for you to obtain extra discounts on your car insurance. In this article, we'll go over some of the effects owning a home can have on your auto insurance.

Owning a Home Means Safer Driving

Auto insurance companies offer homeowners coverage at lower rates because they're presumed to be more responsible in general, and therefore be relatively safe drivers. No matter which insurance company you choose, it's important to make certain the coverage you select will allow you to comfortably manage your risk. In other words, it might be smarter for you to look for the best coverage as opposed to the cheapest policy.

Having great coverage doesn't have to break the bank though. If you're planning to purchase a home or are already a homeowner, you may have several opportunities to save on your auto insurance premiums. You might receive additional discounts for your neighborhood's safety, being married, having a family, etc. You will need to talk to your insurance agent to determine your potential savings as each company has its own criteria for certain discounts.

Bundling Insurance Policies

A majority of insurance companies offer discounts when you bundle several different types of insurance, like homeowners and auto. This helps you access underwriting features and discounts for each type of insurance, including qualification for lower rates if you're older, have good credit, and are married with a job.

Your Home's Location and Car Insurance Rates

How much you might save on auto insurance for owning your home will also depend on where your home is located. When underwriting your home and car insurance policies, insurance companies consider your area of residence's

  • Population density.
  • Crime rates.
  • Accident rates.

If you live in a highly populated urban area, you will likely pay more for both the insurance on your home and car. This is because when an area is densely populated the crime and accident rates typically increase, resulting in higher risk. How much your vehicle and home are worth are also factored in when your insurance carrier sets your rates—the more valuable your property, the more you'll pay for coverage.

Claiming Discounts for Owning a Home

When you're shopping around for insurance, use your home ownership as a negotiating tool. If you've owned your home for a long time and haven't made too many insurance claims, you will appear more stable and qualify for lower rates.

Your insurance provider will likely require you to submit proof that you own your home, regardless of whether you have a mortgage or own it outright. There are several types of proof an insurance company will accept, including:

  • Property tax statements.
  • Mortgage contracts.
  • Deeds.
  • Bills of sale.
  • Mortgage payment coupons.

While the Consumer Federation of America has called for changes in underwriting policies that disfavor drivers simply because they rent their homes, insurance companies continue to prefer people who own their homes. In fact, renters pay an average of 7 percent more for their automobile insurance policies than home owners.