Should You Bundle Insurance? Facts on Bundling and Saving

Many insurance companies offer bundling discounts, allowing you to save anywhere from 10% to 40% on your premiums by purchasing multiple policies — such as auto and homeowners insurance — from the same provider. When deciding whether to bundle insurance policies, consider overall costs and each insurer’s customer satisfaction ratings rather than just looking at the advertised discount amount.

Continue reading to learn what bundling options may be available to you and when it may make sense to buy all of your insurance policies from the same carrier.

On This Page

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  What Is Insurance Bundling?

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  Who Has the Best Insurance Bundle?

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  Why Should You Bundle Your Insurance?

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  Tips For Bundling Your Insurance

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  Is It Always Cheaper To Bundle Insurance?

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  Can You Bundle Renters With Auto Insurance?

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  FAQs

What Is Insurance Bundling?

In the insurance industry, bundling refers to buying multiple insurance products from the same insurance company. This most commonly involves purchasing both homeowners and auto insurance from a single carrier, but you may also be able to bundle other coverage types, such as umbrella, commercial, condo, life, boat, motorcycle and pet insurance.^[1][2][3][4] Generally, your insurer will offer you discounted rates if you opt to bundle your policies.^[5]

Insurance companies commonly promote bundling discounts because they can be mutually beneficial; the insurer benefits because it sells more policies and collects more premium payments, while the customer benefits because of the savings on their policies and the fact that it may be more convenient to manage their coverage when all of their insurance claims and bills go to the same company.^[5]

Insurance Bundles by Company

Several insurance companies advertise bundling discounts on their websites, though you may need to read the fine print or reach out to an insurance agent to clarify what savings you can expect. For example, some insurers may list the discounted amount per policy, while others may list the total discounted amount across all policies. Similarly, the listed amount may be an average discount or the maximum discount rather than a guaranteed reduction.

Check out the following table for an overview of home and auto bundling discounts advertised by multiple major insurance companies.^{[2][3][6][7][8][9][10]}

Keep in mind that USAA coverage is only available to active U.S. military personnel, veterans, precommissioned officers, certain federal employees and the spouses and children of other eligible members.^[11]

Who Has the Best Insurance Bundle?

Among the insurance carriers included in our comparison, American Family advertises the largest percentage discount for bundling — up to 40% across both home and auto insurance.^[7] Meanwhile, State Farm advertises the largest dollar amount discount, with average annual savings of $1,429 per household among policyholders who reported lower rates after switching to State Farm.^[2] That said, various factors can impact which bundle provides the best value.

To help you decide which insurance bundle may make the most sense for you, see the following table, which goes over average annual home insurance and full coverage car insurance premiums for each of the insurers mentioned above, along with their customer satisfaction ratings on a 1,000-point scale for home insurance and car insurance claims.^{[12][13][14][15][16]}

Why Should You Bundle Your Insurance?

While bundling policies can often result in reduced insurance premiums, there are potential drawbacks you need to consider before deciding whether an insurance bundle is the best option for you.

Pros of Bundling Insurance Coverage

Some of the biggest upsides to bundling your insurance policies together include these:^[17]

• Potential cost savings: Most insurance companies offer discounts to policyholders who choose to bundle, so the total amount you pay will generally be less than each individual policy would cost on its own.
• Convenience: Bundling simplifies the process of paying your premiums and filing claims, since you will only have to deal with a single insurance company. In addition, you may be able to build a relationship with a single insurance agent from your selected insurer who will understand all of your coverage needs.

Cons of Bundling Insurance Coverage

There are some situations to be aware of in which it may be detrimental to bundle your insurance policies:^[17]

• Limited flexibility: If a given insurer does not offer the exact coverage you are looking for, you may have to lock yourself into a less-than-ideal home or auto policy to secure your bundling discount, which may cause problems in the long run. Similarly, if the base premium for one of your policies is higher than most other carriers would charge, you may end up paying more than you need to — even with the discount.
• Temporary savings: Your bundling discount may only last for a limited amount of time — especially if you switch one of your policies to a different insurer at your policy renewal — which may make it harder to reliably forecast your insurance bills when making a budget.

Tips For Bundling Your Insurance

As you weigh the pros and cons of insurance bundling, be sure to follow the tips below to make sure you’re getting the best possible deal on the coverage you need.

Ask About Other Discounts

Bundling is just one of the many discount opportunities offered by most insurance companies, so it’s important to ask about other discounts you may qualify for to figure out which carrier can offer you the lowest possible rate when bundling policies. Examples of common home and auto insurance discounts include the following:^[18][19]

Focus on Total Costs

Rather than merely looking at which insurer offers the biggest percentage discount for bundling, pay attention to the total cost of your policies to determine which insurer can provide you with the cheapest rates. Additionally, consider whether you want to opt for a higher or lower deductible for your home and car insurance policies. Higher deductibles lead to lower premiums, but you must be prepared to pay more out of pocket anytime you file a claim.

Shop Around

Comparing quotes from roughly three to five insurers is the best way to ensure you get the right coverage at the most competitive price. Each insurance carrier has its own unique formula for calculating premiums, so one carrier may offer you the same coverage as another at a lower price. Alternatively, you may find that it is better to pay more for better coverage from a certain insurer than to buy a cheap policy that provides lesser coverage from a different insurer.

You can shop around for free on SmartFinancial by filling out a brief online questionnaire. Through our online platform, you’ll be connected with an insurance agent who can help you sort through your insurance options to find the best fit. Click here to select the type of coverage you’re looking for and start comparing quotes now!

Is It Always Cheaper To Bundle Insurance?

Though it is often cheaper to bundle insurance, there may be situations where it is more cost-effective to buy coverage from different insurers. For example, suppose a certain carrier would charge you $2,000 for home insurance and $3,000 for car insurance with a 15% bundling discount — a combined premium of $4,250. If you stick with the same home insurer, it would be cheaper to buy car insurance separately from a carrier that would only charge you $2,200.

Can You Bundle Renters With Auto Insurance?

Numerous insurance companies allow you to bundle auto and renters insurance together to secure a discount. However, bundling discounts are often smaller for renters than they are for homeowners, as the following table shows.^{[2][10][20][21][22][23]}