You’ve heard you can “save a bundle” on your insurance.
But what is bundling and is it right for you?
We’re all looking for ways to save on insurance.
One of the most popular is bundling your policies.
You’ve probably seen the commercials where a perky spokesperson tells you how to “save a bundle” on your insurance, but what exactly does this entail? (And is it the best option for you?)
What Is Insurance Bundling?
Also known as multi policy or multiple line discount, bundled insurance policies simply means purchasing multiple insurance policies (such as home and auto) from a single insurance carrier.
For example, rather than having a homeowner’s policy with Progressive and an auto policy with Travelers, you could purchase both home and auto insurance through Nationwide.
Many companies use these discounts as an incentive for people to bring more business (and premiums) their way. Rather than you spending $1,000 a year with them and $1,200 somewhere else, they get $2,000 a year and you spend $200 less.
Not every insurance company is able to offer multi policy discounts—for instance, a company that only offers one type of insurance should not be able to bundle your policies. Some of the carriers that we work with that offer bundling are Nationwide, AAA, Progressive, and Auto Owners.
Advantages to Insurance Bundles
One of the biggest advantages to a bundled policy is one we’ve already mentioned: bundling your insurance may provide savings on your premiums.
As Florida’s insurance market continues to harden, policyholders are looking for any savings they can get, and a bundled policy is a relatively easy way to do just that.
Another advantage? Those savings can extend to your entire household, so if you have teenage drivers or live-in parents on your policy, they get to enjoy the perks, too.
Bundled policies can also make your life a bit easier—one bill, one payment, one expiration date. For many families, the mental burden alone can be a relief.
Disadvantages to Insurance Bundles
So, why would anyone not bundle their policy?
Believe it or not, very few policies are the right choice for everyone, and insurance bundling is one of them.
To start, savings are not guaranteed, as your insurance premiums are based on many different factors and insurance companies have different ways of calculating them.
For instance, let’s say Company A is offering you a home and auto bundle for $2,000 (after their $500 discount). But Company B can issue you a homeowners policy for $1,000 and Company C can write you an auto policy for $800.
There is no way to know for sure how much you will save until you gather those quotes.
Another disadvantage is that bundling gives you less choice. Perhaps Company A has great homeowners coverage but doesn’t offer Replacement Value coverage for their auto policy. In this case, not bundling would allow you to custom build the coverage you need.
How Do Deductibles Work In a Bundle?
Say you experience one loss that affects both policies. Perhaps a rogue hailstorm damages both your boat and your Jet Ski, or a hurricane damages your home and your car.
In some cases, you would have to pay both deductibles, treating each policy separately. Some carriers, however, allow you to bundle your deductibles as well, so you only pay one deductible per claim.
This is neither a pro nor a con across the board, as each company treats their bundled deductibles differently. You would have to check with your carrier or agent in order to compare apples to apples.
Is Bundling Right For You?
When collecting insurance quotes, your best bet is to work with an independent insurance agent.
It’s very important that this be an independent agent. Because they are not tied to a single insurance company, independent agents can shop the market for you and bring you a selection of great policies that fit your needs and your budget.
An agent that is limited to one carrier can almost always claim that you are saving money by bundling, but that’s because they have no other policies to compare it to.
We always urge our clients to look beyond price, because when it comes to insurance, coverage should be your top priority.
Just because Company A can offer you cheap insurance premiums doesn’t mean that they are the right carrier for you. Paying a bit more for a policy with higher limits, better customer service, and an easier claims experience will give you much better value overall.
Buying multiple policies through a single carrier can help you save on your premiums, but it’s only one of many possible ways.
If you’re concerned about rising insurance costs or just want to streamline your bill-paying process, call Harry Levine Insurance for a free quote.
With more than 30 years in the industry, we have the knowledge, resources, and experience to guide you toward the policies that will protect the life you’ve worked so hard to build. From home and auto to commercial and beyond, call or fill out our online form to get your free quote today.