The average Californian pays nearly $2,000 per year for auto insurance and approximately $1,000 per year for homeowners insurance. You don’t necessarily need to scrape up $3,000 each year to protect your two biggest investments, though. Instead, you could cut your wallet some slack simply by bundling the two policies.
“Bundling” (or getting a “multi-line policy” as they say in the insurance industry) simply means that you buy more than one policy from the same carrier. In this case, you’d buy your homeowners and auto insurance from the same company. In return for your loyalty, you’ll be rewarded with a discount on your monthly premiums — and you may get to take advantage of other savings like only paying one deductible for damage to both your home and your car.
Sounds great, right? However, there are four things you need to know before you hop on the bundling bandwagon:
1. Shopping around is still important
It can be tempting to jump at the very first deal you see, but you’ll never know if it’s the best deal unless you look at a few more offers. In your particular situation, it might actually be cheaper to buy two separate policies, or another company may offer you additional bundled discounts that the first one didn’t.
Luckily, an insurance independent agent can get you bundled quotes from a variety of businesses so that you don’t have to travel all over the web trying to comparison shop.
2. Look closely at the details
Bundling is so common these days that many insurance companies have pre-set packages that you can choose from. However, it’s important to look at all of the details carefully. For example, your bundled homeowner’s policy may come with special jewelry coverage — but if you don’t have a big, expensive jewelry collection, you’ll wind up paying for insurance that you don’t need!
Just be sure to ask your agent if adding or removing specific coverage will affect your bundled discount. In our jewelry example, eliminating the coverage may cancel out your bundled discount — meaning you won’t get the same savings you thought you were getting.
3. Dealing with just one insurance company can be much easier
If they’re not bundled, your homeowner’s and auto policies will each come with their renewal dates, their own deductibles, and their own companies to deal with if something goes wrong. If that sounds more complicated than it needs to be, you’re right!
In fact, J.D. Power & Associates conducted a survey back in 2012 that showed how much happier people were when they bundled their insurance policies together. According to their research, 46% of bundled customers said they would “definitely” renew their policies when the time came. Only 28% of non-bundled policyholders were that definitive about renewing.
4. This isn’t a set-it-and-forget-it feature
Yes, your bundled discount will be good for the length of your policies. However, you can’t assume that your discount will be just as good when you renew. Even if your current insurance company doesn’t raise your rates substantially, another carrier might start offering a better discount. That’s why it’s so important to have your insurance agent do some comparison shopping every year. Otherwise, you could wind up spending more money than you need to!
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