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If your home and auto insurance policies are with separate carriers, you might be missing out on significant savings. Most of the insurance companies that offer these two types of insurance will also offer a multiple policy discount if you bundle your home and auto insurance, making your overall cost of insurance cheaper.
As a bonus, having all of your insurance policies with a single carrier might make it easier to manage your coverage. Still, it’s important to keep in mind that every insurance company offers different savings opportunities for bundling your policies. In most cases, the easiest way to find out the potential savings from bundling your policies is by requesting quotes and comparing the options, which can reveal the options that may be right for you.
How does a home and auto insurance bundle work?
Bundling insurance refers to the process of purchasing multiple types of insurance policies from the same insurance provider. For example, you could buy home insurance from one company, car insurance from the same company, life insurance from the same company and so on. One of the main benefits of bundling is that companies often offer discounts if you hold several policies with them, so it can save you money. In fact, most carriers will automatically add a multiple policy discount on both policies, allowing you to save money on your total cost of insurance.
A home and auto insurance bundle is where both of these policies are bought from the same company and you might be eligible for a discount on the cost of both. While bundling usually refers to home and auto insurance, you may be eligible for a multiple policy discount if you purchase other types of insurance from the same insurer, like an RV, life or umbrella policy. And while the total bundling discount varies by company, the discounts offered for bundling your insurance policies is often one of the best ways to save on your policy premiums.
Understanding homeowners insurance
Though there is no legal requirement for homeowners insurance, your lending company will typically require it to be approved for a mortgage. Even if your home is paid off, there are a wide range of coverages offered in a homeowners policy that can protect your home and may make it worth the cost. For a home with $250,000 in dwelling coverage, the average annual premium nationwide is $1,383, or roughly $115 per month.
What homeowners insurance covers
There four basic coverages offered on most home insurance policies:
- Structure of the home
- Personal belongings
- Liability protection
- Loss of use (additional living expenses)
There are additional coverages you can add if needed to complete your home insurance policy or are looking for more coverage. The types of add-on coverages and limits offered vary by carrier.
Factors that impact your home insurance rates
When you’re shopping for new insurance, there are several factors used to determine your rates, including:
- Your age
- Marital status
- Age of the home, roof, appliances and systems
- Claims history
- Credit history (in most states)
- Coverages selected
When your home policy is up for renewal, your claims history and coverage limits are the most important factors used to determine renewal rates.
Learn more: Average cost of homeowners insurance
Understanding auto insurance
Every state requires that drivers who own a car carry at least a minimum amount of car insurance. In most cases, the requirements refer to a minimum amount of bodily injury and property damage liability, which pays out to the other party if you cause an accident. However, some states require personal injury protection or uninsured motorist coverage as well. For this reason, having a car insurance policy that only meets state requirements is called “minimum coverage.”
However, a minimum coverage policy does not typically offer enough financial protection for most drivers. Many will opt for higher limits of state-required coverage and add additional coverage as well. This includes collision and comprehensive coverage, which insures your vehicle in a covered accident, regardless of fault. Having these two coverage options, along with higher liability limits and other add-ons, like roadside assistance and rental car coverage, is often referred to as “full coverage car insurance.”
Factors that impact the rate of car insurance
The average cost of full coverage car insurance per year in the U.S. is $1,771 , or roughly $148 per month. Before you get a quote for auto insurance, it’s important to understand what factors come into play when insurers calculate rates. Below are just a few of the factors that impact car insurance rates and can affect your auto insurance:
- Vehicle make and model
- Annual mileage
- Driving record and years of driving experience
- Credit score (excluded in some states)
- Age and gender (restricted in some states)
Information you need to get car insurance
To prepare an auto insurance quote for you, car insurance companies will ask for the following information. Some, like the personal information, will be required for all drivers in your household. These include:
- Full name
- Date of birth
- Marital status
- Claims history
- Vehicle information
- Requested coverage and limits
How to bundle your home and auto insurance
Bundling your home and auto insurance is easy. In fact, once you start the quoting process, many companies may ask if they can prepare you a home and auto insurance quote together. Here’s what else you can do to make the process smoother, as well as what to expect:
- Gather all the information needed to get home and auto quotes. Having all the information ready will make the quoting process easier and faster. Getting quotes prior to your renewal dates for your current policy may make you eligible for an early quote discount.
- Get quotes online or work with an independent agent to get quotes from several carriers to compare. Independent agents work with multiple carriers, so they can do the shopping for you. If you would rather get quotes yourself, be prepared to fill in your information each time to get quotes from each carrier.
- Compare quotes. The best way to compare home and auto bundle quotes is to get the same coverages in each quote. This way, you can make a better comparison on price. Pay attention to extra benefits, coverages and discounts offered by some carriers that others may not offer.
- Make a decision and finalize. After comparing quotes and asking questions, you should be able to make an informed decision on your home and auto bundle. Let the agent or carrier know so you can finalize the applications, set up your payment and switch carriers.
Can I bundle other policies?
Yes, you can bundle other policies, though the types of policies that can be bundled vary by insurer. Some policies you may be able to bundle together for more savings are:
- Vacation home
- Life insurance
Pros and cons of bundling
|Pros of bundling||Cons of bundling|
|Potential for large savings||Savings may not be worth switching|
|Get targeted customer service||May not be bundled with the same carrier|
|Less likely to be dropped after multiple claims||Claims satisfaction differs by policy type|
|Could unlock additional discounts|
- Potential for large savings: Some carriers offer up to 25% or more in savings when bundling home and auto. This could add up to big savings on both policies.
- Get targeted customer service: If you purchase multiple policies with the same carrier, it may be easier for the company to get to know your needs. In turn, your agent may be in a better position to ensure that there are no coverage gaps and that you are fully protected.
- Less likely to be dropped after multiple claims: Whether you have a string of bad luck or live in a high-risk area, if you file too many claims, you could get dropped. However, the more policies you have with one carrier, the less likely the company will drop you for excessive claims.
- Could give you access to additional discounts: When you bundle your home and auto insurance coverage, you are less likely to switch carriers, and staying with the same company can unlock additional discounts for loyalty and longevity.
- Savings may not be worth switching: If you already have low rates, the savings for the home and auto bundle may not be worth the time and effort it takes to switch carriers.
- May not be bundled with the same carrier: Not all insurers offer both home and auto. Instead, they work with affiliate companies to offer the bundle discount, but each policy is insured with a different company.
- Claims satisfaction differs by policy type: Some insurers may be great at handling auto insurance claims but lack in homeowners claims customer satisfaction, or vice versa. If the company has low satisfaction rates in a line of insurance you need, you may want to rethink purchasing that type of policy from the company.
Frequently asked questions
The best homeowners insurance company varies for each homeowner. Because each homeowner’s needs and priorities vary, as do the risks their homes face, there is not one single homeowners insurance company that will be the best option for every person. If you’re looking for the best home insurance option for you, it may be helpful to determine what your needs and wants are from an insurance company, whether that’s the lowest price, the most add-on coverage options, or something else entirely. By knowing the answers to these questions, you may be better prepared to narrow down the options and compare rates, coverage and other features offered by the carriers that fit in order to determine which option is best for you.
The best auto insurance company varies for every driver and household. For most drivers, the best auto insurance is the one with the coverage options you need at an affordable price. For example, households with multiple drivers and cars may want different coverage and options compared to a single individual who rarely drives their vehicle. Exploring different car insurance companies based on your needs may help you find the carrier best suited for you.