Insurance bundling is a way for people to save money on their home and auto insurance by purchasing more than one insurance policy from the same company. Depending on the carrier, you can get additional bundle discounts for other policies, like life and boat insurance. To bundle your home and auto insurance, gather all the necessary information and get several quotes to compare to determine if bundling will save you on insurance.
How does a home and auto insurance bundle work?
A home and auto bundle works similar to buying both policies separately, except both policies are through the same insurance carrier. Insurance companies provide the bundle discount as an incentive to insure both policies with them rather than shop for individual carriers. Even if you bundle both policies together, they are still separate policies and operate independently to provide the coverage outlined in the policy.
For example, let’s say you run off the road and into someone’s home, damaging the exterior. Thankfully, no one is injured, but you have to pay for the damage to the house. Even though you have personal liability coverage under your bundled home policy, that coverage does not apply to the damage you caused with your car. Instead, your property damage liability coverage under your auto policy would pay for the damage you caused.
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 may make it worth the cost. For a home with $250,000 in dwelling coverage, the average annual premium nationwide is $1,312, or roughly $109 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.
Information you need to get homeowners insurance
Be prepared to prove the following information when shopping for homeowners insurance:
- Full name
- Date of birth
- Marital status
- Social security number
- Prior policy information
- Mortgage/lender information
- Information on the home (age, style, roof and systems age, square footage, any upgrades, safety devices etc.)
Understanding auto insurance
In most states, you are required to carry a minimum amount of liability coverage on your car insurance. If you choose just the minimum liability coverage, there is no physical damage coverage for your car, only coverage for the other driver if you cause an accident. Full coverage insurance will help to provide physical damage coverage for your car regardless of who is at fault.
Factors that impact the rate of car insurance
The average cost of full coverage car insurance per year in the U.S. is $1,674, or roughly $140 per month. When you get a quote for auto insurance, you should be ready to provide the following information to get your personalized rate:
- Full name
- Date of birth
- Marital status
- Claims history
- Vehicle information
- Coverage needs
You will need to provide personal information for all drivers in the household. All these factors are included in determining your car insurance premium rates and whether or not the insurance company will offer you coverage.
How to bundle your home and auto insurance
- 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||Could cost more|
|Convenience||May not be bundled with the same carrier|
|Less likely to be dropped after multiple claims||Certain vehicles or homes may not be the best option for bundling|
|Some carriers offer single deductible|
- 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.
- Convenience: Having both policies with the same carrier and agent is easier. You only have to make one phone call to make changes or file a claim.
- 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.
- Some carriers offer single deductibles: With some carriers, you can get a single deductible on home and auto. If you have a claim that includes both policies, you only have to pay a single deductible instead of two separate deductibles per policy.
- Could cost more: Even though bundling comes with a discount, it’s not always the best deal. You should compare bundled and individual quotes to see which would cost more.
- 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.
- Certain vehicles or homes may not be the best option for bundling: Specialty cars or high-value homes may require special carrier coverages. In this instance, it may be best to get separate policies from separate companies.
Frequently asked questions
What is the best homeowners insurance company?
Finding the best homeowners insurance company is based on needs and wants. Getting several quotes from different carriers can help you determine which is best to fit your criteria.
What is the best auto insurance company?
The best auto insurance company has the coverages you need and the extras you want in a policy. Compare several quotes with different companies to find the right combination at the best price for your needs.