There’s money to be saved by bundling your insurance policies — and plenty of it.
According to a recent study we completed at insuranceQuotes, U.S. consumers can save, on average, $295 when they “bundle” their auto and homeowner’s insurance with the same carrier.
Some states offer better bundling efforts than others.
Louisiana, for instance, shows average savings of $548 when residents merge auto and home insurance policies with the same company. Oklahoma ($489), Texas ($429), Mississippi ($405) and Kansas ($403) follow suit.
Thinner bundling bargains are available in other states, including Idaho ($172), Vermont ($174), Utah ($183), West Virginia ($184) and Virginia ($189).
While the numbers do vary, it’s almost always a good idea to bundle your insurance policies. To get the job done right, though, there are bundling routes to take that are significantly better (and more financially beneficial) than others.
So let’s tackle the bundling issue together, with these five tips to get you started.
1. Bundling insurance: What’s in it for you — and your insurer
Insurance companies love selling more policies, and guaranteed access to your bank account. What they hate is customer turnover, which costs insurers money to market their services to new customers. The “win-win" is that customers get discounts for pulling home, life, and auto insurance policies together, at rates up to 25 percent less than buying those products from multiple companies.
For insurers, bundling gives them the long-term relationships they favor and stronger, more durable ties. Know that going into any conversation with an insurer, and use it to your advantage.
2. Make sure to ask about bundling
Most major insurance companies offer bundling policies, including Nationwide, Liberty Mutual, Progressive, and online provider platforms, such as Esurance.
They’re all transparent about them, but your best bet is to ask your insurance provider for a bundled discount, then ask for a deeper discount if you provide direct deposit straight from your bank account when you make your monthly payments. When you do ask, make sure to ask about all potential insurance discounts — not just bundled accounts.
3. Shop around for insurance discounts
If your insurance company doesn’t provide a satisfactory bundling discount (and anything below 5 percent off your regular, combined payment for auto and homeowners is low) then start shopping.
4. Focus on total costs
Don’t just consider a potential discount from an insurance company, look at the entire package. For example, make sure to add in any changes in deductibles you’ll pay under a new, combined policy (the amount you pay toward a claim before the insurance company’s benefits begin).
In other words, weigh any lower out-of-pocket premium rate against any higher deductible your new bundled policy has you paying. If the math proves tricky, get a trusted financial professional involved.
5. Use leverage for future discounts
If you’re currently getting a bundled discount from an insurance company on, say, an auto insurance and a life insurance policy, use that leverage when you need additional insurance.
For instance, if you get a boat, start a business, or buy rental property, you’ll likely qualify for even more savings as you buy more policies with an insurer.
Make lump sum payments, and save even more cash. On top of the discounts you earn from bundling, you can further cut insurance costs by paying annual insurance bills in one or two lump payments, instead of covering those costs on a monthly basis. Expect to save another 5 to 10 percent annually when making lump sum payments.
The downsides to bundling? There aren’t many; however, doing business with a single insurance carrier, even a big one, can curb flexibility. So be sure to shop carefully and make sure you’re getting the best insurance coverage for you — bundled or not.