Bundling Your Insurance: Costs and Benefits

| September 24, 2012

home insurance Bundling your insurance means getting more than one type of insurance, such as auto, homeowners and life, under the same carrier.

J.D. Powers and Associates reports that more than three-quarters of auto insurance customers bundle their auto with at least one other insurance. More than half bundle their auto and homeowners insurance.

Bundling your insurance can save you money, but it’s still important to shop around for the best deal.

Why bundling works

The main reason to bundle your insurance policies is because it gets you a discount. It’s a potential win-win because the insurance company gets you to spend more of your money in one place, and in return, it motivates the insurance company to offer you discounts to keep you happy.

This often includes a discount on premiums and may include combining deductibles; if, for example, a storm damages both your house and your car.

Bundling also reduces paperwork and bills. You can pay your bill to one insurance carrier rather than three, cutting down on time and confusion.

Bundling disadvantages

Bundling isn’t going to save everyone a lot of cash. Some individual types of insurance may offer steep enough discounts, such as vehicle insurance with safe-driver and accident-forgiveness discounts, that they negate how much money you’d save bundling.

J.D. Power and Associates, a global marketing information services company, discovered in its 2011 U.S. National Auto Insurance Study that the satisfaction of customers who didn’t bundle was higher than customers who did. It suggested that discounts such as accident forgiveness, ticket forgiveness and claims-free were less common discounts but resulted in more customer satisfaction.

If bundling, it’s also important to make sure you need every option that you are being offered. In some cases you may be purchasing insurance products for which you don’t have as much use.

Bottom line: Shopping around is key. Insurance quotes will vary based on your claims history and driving record, and how eager insurance companies may be to expand business in your state. A good strategy is to call several insurance agents and compare bundling insurance quotes. Also, once with a company, it is to your benefit to continue evaluating to make sure you’re still getting the best deal.

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Category: Auto Insurance, Insurance Agents & Brokers, Property Insurance, Services

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Central Ohio journalist with 15 years experience at daily newspapers. Freelance writer and amateur photographer. Storytellers are my heroes, poets my idols and photographers my looking glass.