Should I Bundle My Insurance?

Lucy Lazarony
November 17, 2020

Bundling your insurance can save you money. How much can you save by bundling two or more insurance policies together? You could save up to 25 percent on your insurance premiums. The most common bundling combination is homeowners insurance and auto insurance. But many insurance companies will allow you to bundle life insurance, renters insurance, condo insurance and insurance for boats and motorcycles.

When you bundle insurance policies, you’ll get a single bill for all your insurance premiums. So there is a convenience, bill consolidation, that comes with bundling as well. Insurance companies would like you to have multiple policies with them so reach out about discounts for bundling one or more policies together. Many insurance companies offer bundled deals as a way of attracting customers and deepening customer relationships. So be on the lookout for these bundled deals. But make sure there isn’t an even better deal out there from another insurance company. You may be able to beat the rate of a bundled premium with a stand-alone policy from another insurance company. Let’s take a closer look at the pros and cons of bundling insurance policies.

The Advantages of Bundling Insurance Policies

The Price Is Right. As mentioned earlier, you could save up to 25 percent on your insurance premiums by bundling them together. So if you have a homeowners policy and auto policy, see what kind of deal you can get by choosing policies from the same insurance company.

Streamline Your Finances. Want one less bill in your life? You’ve got it. You’ll get a single bill for your bundled insurance premiums. Rather pay by app? You will have one app for both policies. So you’ll be able to pay premiums, make claims and review your policies, all from the same place.

Have a Single Deductible. Let’s say a major storm damages your home and your car. If your home and auto insurance policies are bundled together, you’ll have just one deductible to pay. And this will bring some much needed savings at a difficult time.

The Big Disadvantage of Bundling Insurance Policies

Your bundled insurance deal may not be the best deal out there. And you may be able to get a better insurance deal from another insurance company. Not sure if you should bundle or not?

Use SmartFinancial to shop for the cheapest auto insurance deals and home insurance deals in your area. See if two stand-alone insurance policies are cheaper than one bundled deal with your current insurance company. A big price savings is the biggest reason not to bundle. So check to see that the bundled deal is as a good deal as you think it is.

Re-Evaluate a Bundled Deal

Every year, check to see if your bundled deal is as good as a deal you can get out in the open insurance market. You want to make sure that a bundled good deal is still as good a year from now. Otherwise, it may be time to make some changes.

Re-Evaluate Your Insurance Needs Every Year

Does your insurance coverage still fit your needs a year later? For example, take car insurance. Have you finished financing a car lately? Are you still keen to keep collision and comprehensive coverages? These coverages are required by your lender when you are financing your loan, but are optional once the loan is paid.

Collision coverage is coverage that helps to repair or replace your car if it’s damaged in an accident with another vehicle or object such as a fence or a tree. Comprehensive insurance covers events that aren’t covered by collision insurance. These events include fire, theft, vandalism and damages from weather such as a hailstorm, a windstorm, a hurricane and a tornado.

One way you can lower your cost of these insurance coverages is by raising the deductibles. A deductible is the amount you must pay before an insurance company begins to pay on an insurance claim.

And if the car is getting older and the market value is falling, you may wish to drop these coverages altogether. Talk over the cost savings with your insurance company. How much will you save with a new deductible and how much will you save by dropping the collision coverage and comprehensive coverage on an older car? These are all things to consider when evaluating your auto insurance needs. A larger deductible on your home insurance will help to lower your premium as well. So if you are comfortable with big deductibles consider these money-saving moves.

Other Money-Saving Moves

Here are three quick easy ways to save on insurance policies.

Pay Once or Twice A Year. Rather than sign up for monthly insurance payments, pay the entire annual amount or six-months amount. Insurance premiums are cheaper when you pay once a year.

Build Up a Credit Score. Insurance companies use credit data to assign risk pools and set customer insurance rates. Consumers with good or excellent credit get better insurance deals than consumers with no or bad credit. So build up your credit score and save money on your insurance needs. Need some tips? Get current on all past due accounts, pay down debt and avoid taking on new debt. Get in the habit of paying your bills on-time every month. These four moves will help you improve your credit score.

Shop Around. Because it can’t be emphasized enough. You will want to shop around for the best insurance deal. Check out auto insurance rates and home insurance rates with the help of SmartFinancial. Find the best stand alone insurance rates you can and then compare them with the bundled deal being offered by your insurance company. What is the best deal? Do you want to stay with your bundled deal or make new deals with new companies? Evaluate your insurance budget and decide.

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