Bundling auto and renters insurance

What does it mean to bundle auto and renters insurance?

Bundling your renters and auto insurance just means buying both policies from the same insurance provider. Bundling can help you get more affordable renters insurance and car insurance. In exchange for having multiple policies insured with a provider, most companies offer a bundling discount, also referred to as a multi-policy discount, when you buy both policies.

You will usually have two separate policies with two different policy numbers, although some companies assign the same policy number to bundled policies. Auto insurance and renters insurance offer two different types of coverage — one for your vehicle and liability while driving and one for your personal belongings and guest liability. 

Although renters insurance is not a legal requirement like auto insurance is in most states, if you are a renter and don’t already have a renters insurance policy, you may want to consider buying one. Renters insurance primarily covers your personal belongings from covered losses and provides liability coverage in case you are found at fault for injuries or damages to guests’ property. 

Coverage for your driving and vehicle

Most states require drivers to have a minimum level of auto insurance. This is to protect them from financial challenges in the event of an accident, and to help ensure that costs for property damage and injury are covered.

It's worth noting that minimum car insurance coverage levels in many states are quite low, and might not be enough to give you adequate coverage following a serious accident. Many insurance experts recommend that you purchase more than the required minimum. You may also want to consider full coverage, which covers damage to your own car following an accident or other vehicle mishap.

Additionally, the best car insurance companies will likely offer endorsements that you could add to your policy for increased financial protection. These coverage types are optional but may offer relevant financial protection for your circumstances. Common endorsements include:

• Roadside assistance
• Car rental coverage
• Gap insurance
• Accident forgiveness

Coverage for your belongings

Unlike auto insurance, states don’t require that you purchase renters insurance. However, many landlords will require you to buy a renters insurance policy and will probably dictate the minimum liability coverage you have to purchase. Renters insurance protects your finances in a few different ways. Namely, it offers coverage to replace your personal items if they get damaged or stolen in a covered claim. It also covers your liability if a guest gets injured in your apartment or if you accidentally damage your unit or the apartment building.

Basic renters insurance policies usually include these coverage types:

• Personal property coverage: This is the primary renters insurance coverage and pays for damage to your belongings, like your furniture, clothes and home goods, after covered losses and up to certain limits.
• Additional living expenses coverage: This coverage will kick in if you can’t stay in your apartment after a loss. Also called loss of use coverage, it could help pay for hotel bills, restaurant meals and pet boarding up to certain limits.
• Liability coverage: This coverage protects your finances if you are found at fault for guest injuries or damage to a guest’s property. Liability coverage can also pay for legal fees if you are sued and need to defend yourself.

Many renters policies also include medical payments coverage, which pays for guest injuries regardless of fault. Just like car insurance companies, the best renters insurance companies usually have endorsements that can help you personalize your coverage. You might be able to add identity theft coverage, scheduled personal property (for high-value or unique items) or coverage for business equipment.

Is it cheaper to bundle auto and renters insurance?

Many companies that offer both auto insurance and renters coverage will give you a discount on one or both policies if you carry them with that insurer. These discounts may be available even if you don't purchase both policies at the same time. If you currently carry renters and auto insurance policies with different carriers, it may be worth asking each if they would extend a bundling discount if you were to switch carriers. Asking about discounts and requesting quotes could help you see which carrier offers the most impactful savings. 

The average cost of full coverage car insurance is $2,542 per year or about $212 per month. Minimum coverage car insurance averages $740 per year or about $62 per month. Renters coverage is generally inexpensive, with an average annual cost of just $173 per year, or about $14 per month, according to the Insurance Information Institute (Triple-I).

Note that not all carriers will extend a bundling insurance discount for renters and auto insurance. Bundling may not be worth it if the potential discount does not outweigh the low rates you find with another carrier.

How to bundle auto and renters insurance policies

Most insurance companies try to make it as easy as possible to add a policy, especially if you already have one with them. To give you an idea of how to add a renters policy to your existing auto policy, here’s what you might need to do:

1. Request a quote: If your auto insurance company’s website allows you to get quotes online, sign into your account and submit a request for renters insurance. If you can’t submit one online or you prefer to talk to an insurance agent, call your auto insurance company and ask them to provide you with a quote.
2. Provide coverage details: Your insurance provider will most likely want to double-check the personal information they have on your account, like your name, phone number, birth date and the address you want to insure. They will also need to know what date you would like rental coverage to begin and how much coverage you want to purchase.
3. Learn about potential discounts: Your insurance company will probably inform you about how much you could save by bundling a renters policy with your auto policy. If they don’t, ask them how much of a discount you would get and find out if you qualify for any new discounts.
4. Get quotes from other providers: If you’re happy with the quote from your current provider, you might go ahead and purchase the policy. However, if you feel like you could be saving more or it’s been a while since you comparison-shopped, request auto and renters policy quotes from several other insurance providers. Ensure that you use the same coverage types and amounts so you can make a fair comparison.

Which companies offer bundling options for renters and auto insurance?

Shopping for renters and auto policies might seem daunting, but you may be pleasantly surprised at how many insurance providers give you the option to bundle. Even insurance companies that don’t write their own auto or renters policies might partner with other providers in order to give you a discount and make it easier to manage your insurance products.

To get you started, here are some companies that allow you to bundle renters and auto insurance:

• State Farm
• Progressive
• Allstate
• Farmers
• Nationwide
• Travelers

Can I bundle other policies?

It depends on the company. Bundling discounts are most common for auto and property insurance — like home, renters and condo policies — but some companies offer a discount for bundling your auto with other types of insurance too. Depending on your auto insurance company, you might get a bundling discount for buying car insurance with:

• Boat insurance
• RV insurance
• Motorcycle insurance
• Umbrella insurance
• Life insurance

It's important to note that life insurance bundles will only result in a potential discount on the other type of insurance you are bundling it with. Life insurance is never eligible for discounts. Each company has different guidelines around discounts. Talking with a company representative is the best way to determine if bundling additional policies will save you money.

Pros and cons of bundling

Bundling car and renters insurance may deliver some perks, but it also comes with some potential drawbacks you may want to consider.

Ultimately, bundling your auto and renters insurance together may help you save money and might make managing your policies a little easier. However, having all your policies in one place could have drawbacks, so you may want to speak with a licensed insurance agent to decide if bundling these policies and switching carriers is the right choice for you.

Frequently asked questions