Should I bundle my insurance policies or keep them separate?

25 Sep

Bundling insurance policies simply means buying different types of insurance policies from the same insurance company. The most common type of bundling is usually a car insurance and home insurance policy, but bundling can include other policy types such as life insurance or even an umbrella policy.

However, while bundling is a pretty common tactic, it is not always the best option. Let’s have a look at how to decide whether bundling is a good idea for you or if you should purchase your policies from different insurers. 

Is it a good idea to bundle home and auto insurance?

Insurance companies have used bundling discounts for years in order to get their customers to purchase more coverage. Bundling discounts tend to be one of the largest discounts that insurers offer, the discount can range up to 25% which can result in major savings.

In addition to the financial savings, bundling tends to be more convenient, you only have to communicate with one insurer, pay one bill and use a single app or website to manage your policies an d claims.

However, these benefits are never a given. Regardless of how hard you try to bundle your policies you may still end up dealing with more than one insurer. Some insurance companies may sell auto and homeowners coverage but not life or umbrella policies which means you will need to deal with more than one insurance company.

In addition, bundling may not always be the best option when it comes to price. In most cases, you will save more money if your homeowners insurance is the most expensive part of your bundle. If you have a very expensive car insurance policy, bundling might not make financial sense. 

Insurance companies rate risk differently which can lead to dramatically different premium prices which means you may be able to find cheaper car insurance and more savings from a different insurance company. 

The best advice is to gather quotes for both bundled options as well as keeping your coverages separate. Once you have a variety of quotes do the math to see what option is the best for you financially. 

It is important to also remember that price should not be the only factor. Consider the financial strength of each insurer you are considering. In addition, be sure to read reviews regarding how each insurance company handles customer service as well as claims. A cheap premium is not worth the savings if you have issues getting a claim paid after damage from a covered peril.

Best insurance companies to use for a bundle 

Unfortunately, there is not simple answer to this question. Premiums can vary dramatically between insurance companies as can bundling discount percentages. In addition, insurers consider a wide variety of factors when setting a premium, everything from your home’s location and roofing materials to your credit score will be considered. 

All of this means that the only way to find the best insurer for you, regardless of whether you bundle your policies or not is by shopping your coverage with numerous insurance companies before finalizing your coverage.

Tips for bundling 

Bundling is usually pretty easy but here are a few tips to make sure the process goes smoothly:

  • Shop a variety of insurance companies, both national and regional. 
  • Compare the numbers, review the coverages and discounts being offered as well as read reviews regarding customer service and how claims are handled
  • Once you have a new policy in place make sure you cancel your current policy 

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