Bundling Home and Auto Insurance: Pros and Cons
To bundle or not to bundle — that’s the question when it comes to home and auto insurance. For those new to the game, “bundling” is when you open more than one line of insurance with the same company. (So, for example, you buy both your home and auto insurance with Progressive or both your auto and renters insurance with State Farm.)
Companies typically offer generous discounts for bundling, shaving between 5% and 30% off premiums for loyal customers. However, sticking with the same insurer for all your policies won’t always net you the cheapest rates.
We’ll cover the pros and cons of insurance bundling in greater depth below, but first, here’s an overview of what bundling discounts look like with some of the most popular insurance companies.
Companies with home and auto insurance discounts
Below are the most popular companies, by market share, that offer discounts for customers who bundle auto insurance with homeowners or another line. Discounts shown are averages for each company, but remember that your own rate won’t necessarily reflect an insurer’s advertised savings, as prices are highly individual.
10% or more off home
Up to 25% off home
Up to 15% off home with auto
Up to 5% off auto with renters
Up to 20% off home
*Please note USAA only serves current and former members of the U.S. military and their immediate families.
Quotes vary depending on the value of your car and home, your insurance history, your location, and many other factors, which is why it’s important to request personalized estimates to see how much you’d actually save by bundling with any given provider.
When to Bundle Home and Auto Insurance
| • Save between 5% and 30% off your home and auto insurance, on average|
• Simplify your insurance management by keeping both policies under one roof
• Become more valuable to your insurer so it’s less likely to block renewal after a claim or accident
| • Using separate insurers might be cheaper|
• Coverage options vary by provider
• Complacency means insurers might hike up rates
Bundling Home and Auto Insurance: Pros
Bundling insurance policies might seem like a no-brainer. Since bundling increases your insurer’s profits and decreases the odds that you’ll leave it for another provider, companies will usually cut you a pretty good deal for doing so, with discounts for bundling home and auto generally falling between 5% and 30%. And those face-value savings aren’t the only perks to bundling.
Bundling can help you save on home, auto, and other insurance lines
As mentioned above, bundling home and auto insurance (the most common option) can save you anywhere between 5% and 30% off your premiums — though most companies’ advertised discounts fall somewhere in the 10% to 20% range.
Beyond home and auto, you can also save by purchasing life insurance, boat insurance, business insurance, RV insurance, and any number of other lines with your auto insurer. Not all companies bundle all of these lines, of course, but it’s still worth asking about potential discounts with your current insurer when looking for a new insurance product.
Bundling makes insurance more convenient
Some people prefer the simplicity of keeping all of their insurance under one roof. When you work with a single provider, you only have to pay premiums in one place, deal with one set of agents and website nuances, and learn to navigate one company’s claims processes. Since insurance is such a complex product in the first place, those little added comforts can go a long way.
Bundling could make you harder to drop
Insurers are, as a whole, unlikely to “drop” you midpolicy. However, there are reasons why they might not decide to renew your coverage when the time comes: for instance, if you file one too many large claims or if the company finds out that you bent the truth on your application. But if you have more than one line of insurance open, it’ll likely think harder before deciding not to renew your coverage after an accident or claim.
Bundling Home and Auto Insurance: Cons
Bundling deals look pretty attractive at face value. If you’re already insuring your car with, for example, Allstate, and then buy a house, it might be tempting to spring for that 25% discount on homeowners insurance right away. But no matter how alluring the numbers are, you should still do your due diligence by rate shopping before deciding to bundle. There are a few reasons for that:
Using separate insurers might be cheaper
First and foremost, bundling won’t always be cheaper than insuring your car and home with separate companies. Each insurer sets rates differently according to your personal risk factors (age, location, driving record, etc.), and the company that gives you great rates for home insurance might not be the same one that’s cheapest for auto.
That’s especially true for customers with expensive car insurance. Bundling discounts tend to be larger for your home than for your vehicle, so if you’re paying an arm and a leg for auto (maybe because you have an accident on record or a long claims history), it’s doubly important to check rates from multiple companies and see if an insurer with lower rates across the board can cut you a better deal than you’d get by bundling.
Coverage options vary by provider
Second, there’s the question of coverage. Every customer — not to mention, every home and vehicle — has unique coverage needs. Certain factors warrant specific policies; for example, you’ll want classic car coverage if you own antique vehicles, earthquake insurance if your home is near a fault line, boat coverage if you’re insuring watercraft, and so on.
Not every company will offer the select coverage options (or “endorsements”) that you need for both policies. Before jumping into a bundling deal with savings in mind, carefully review the options available and make sure they match your needs for home, auto, and any other insurance line you’re considering adding into the mix.
Complacency means that insurers might hike up rates
Last, but certainly not least, there’s a chance that bundling could actually net you more expensive insurance in the long run. Customers who open multiple insurance lines with one company tend to get comfortable and are less likely to shop around when it’s time to renew their coverage. As a result, insurers may nudge up rates each year and assume that loyal customers will continue to pay.
That doesn’t make bundling an inherently bad decision. It just means that customers who do bundle should keep an eye on their premiums and compare rates every few years to make sure that their current provider isn’t inflating prices unnecessarily.
Non-Homeowners Can Save With Multi-Vehicle Discounts
Pairing home and auto insurance is one of the most popular ways to save (and tends to net the biggest discounts), but it’s not your only option for bundling by a long shot. Along with discounts for homeowners, renters, and condo dwellers, most companies will offer savings for customers who simply insure more than one vehicle under their roof.
Note that “multi-vehicle” discounts don’t just apply to cars and trucks. They can also extend to boats, RVs, sport vehicles, and more. If you’re insuring any type of vehicle, it’s worth calling up your current auto insurance provider to see whether it’ll cut you a deal for adding that second line to your account.
Companies with multi-vehicle bundling discounts
Below are some of the top companies that offer loyalty savings for customers who insure more than one vehicle. The types of vehicles included and the potential savings vary by company. As always, that means that you should request personalized estimates for a company whose policies and rates best fit your situation.
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Bundling Home and Auto Insurance: The Bottom Line
Bundling home and auto insurance might save you a bundle (sorry, we couldn’t hold that one in any longer). With average discounts ranging from 5% to 30% off your premium each year, the savings potential is significant.
That said, bundling isn’t always your best bet. Insuring home and auto with two separate companies that offer you low rates for each line could easily end up being cheaper than scoring 20% off a more expensive overall policy.
The trick is to work the market. Shop around and compare rates for both bundled insurance and separate home and auto policies — and don’t settle until you’ve found a provider or combination of providers that offers a fair price and all the coverage you need to feel well-protected.