The insurance industry is evolving as its target market continues to become younger, less brand loyal, and more tech-savvy. The good news is that consumers are benefiting from more flexible plan offerings, and bundling is one option that’s worth checking out.
Insurance bundling, sometimes called a multi-policy discount, is a common way to save money on insurance needs. Most of us are familiar with the concept of bundling our internet and cable, but does bundling your car and renters insurance bring the same benefits? We examine the good and bad below:
How much? This will depend on several variables, like if you live in a high-risk location (think hurricanes) and what type of car you drive. Still, average savings are usually between 5 and 10 percent on your premium when bundling. You’ll also save money if you have to file a claim, since individual deductibles (the amount of money you are responsible for paying toward an insured loss) can be expensive. If something were to happen to both your car and apartment without bundling, you’d have to meet the amount per policy before the insurance company pays the rest. After you bundle your renters and home insurance policies, you’ll only have to meet one deductible.
Like only paying one deductible, you’ll save time by only dealing with one insurance company if something happens and you have to file a claim.
Using the same company for your car and renters insurance means one policy, one bill to pay, and one username and password.
Loss of Coverage
As is the case when it comes to bundling your cable and internet, those looking for bundled renters and car insurance are often lured by the cost savings and tend to overlook less-than-stellar service. In these cases, bundling can result in one-size-fits-all coverage that leaves you unprotected from certain risks.
Loss of Control
Your current plan may allow you to use your own repair company or visit your garage of choice. It’s possible that a bundled plan might require you to visit certain places, and that could mean being dissatisfied with the service you’re paying for.
Empty Marketing Claims
Like many deals, companies push bundling opportunities because it benefits them. After all, offering bundling discounts is an easy way for companies to convince you to consolidate all of your insurance business in one place, thereby giving them more business. Many times this benefits both parties, but do your homework. If something seems too good to be true, it just might be.
How to Bundle Successfully
- Shop around. Don’t let bundling make you a lazy consumer. Many major insurance companies like State Farm, Liberty Mutual, Allstate, Nationwide, and Progressive offer bundled services. Even if your current auto insurance company offers to bundle, you should never just assume they offer the lowest cost policies around. Experts recommend shopping around for new insurance at least once every two years.
- Find an insurance agent that fits your needs and style. Do you want someone to call and ask questions, or do you prefer using a company with a 24/7 chatbot?
- If changing insurers, watch for cancellation fees and any possible lapse in coverage. Most large companies don’t charge fees, but some do for canceling before your policy is up. You also want to be sure you don’t have a lapse in your car insurance coverage if you switch insurers to bundle. Informing your insurance company 30 days in advance of a switch will help prevent this problem. Still, you should make sure you have already decided which car insurance company you are going with by the time you’re ready to cancel.
Most of the time, the discount on renters insurance that bundling offers is small. This is because renters insurance is fairly inexpensive compared to other insurance policies. Your auto insurance is where you save the most money when you bundle these together, simply because it’s the more expensive policy.
There are clear advantages to bundling insurance policies, but it’s important to make sure that bundling benefits don’t outweigh the drawbacks. Your coverage needs should always come first. After all, the purpose of bundling is to consolidate policies to save money and enjoy convenience. After getting quotes from three to five companies, evaluate if the cost savings is really worth it for you.