National, regional, and local insurance companies tout the same temptation: bundle home and auto insurance to save money. It helps the insurance company obtain two insurance policies from the same person so they can seek fewer new customers. New customers bring risk because the insurance company doesn’t know whether income, driving record, residence, income, and occupation will meet their standards. It’s easier to lean on current customers who already pass muster because they are likely to renew expiring coverage. However, is bundling auto and home insurance an excellent idea for you? Reevaluate the bundle method by seeing it in a new light. These six ways will determine if bundling is worth it.
Value
The cost of the vehicle and home covered in the policy will set the tone for insurance rates. A valuable home benefits more from bundling than a home without the bells and whistles. Home security, sprinklers, smoke detectors, and gated communities are some discounts available for home insurance. Conversely, a luxury vehicle (or a valuable vehicle) raises monthly premiums when bundling, making separate home and auto insurance desirable.
Location
City, state, and neighborhood affect insurance rates. Homes living in one city and neighborhood may differ from another neighborhood in the same city. The same is true for homes in one city versus another city and homes in one state versus another state. It comes down to safety. Safer areas get more savings from bundling than high-risk areas such as flood zones, crime, and natural disaster prone areas. In some instances, insurance companies won’t bundle home and auto for high-risk areas.
Quality
To bundle, both the auto and home insurance need to be superb. It has to be the right fit for your vehicle and home. One insurance company brags about being the best auto insurance in the nation, but their home insurance is lacking. A second insurance company has better home insurance, but their auto insurance is inadequate. Therefore, review home and auto insurance separately. Select a company with excellent auto and home insurance. Otherwise, keep home and auto insurance separate.
Provider
Home and auto insurance doesn’t have to co-exist in the same company. You could go to a superb auto insurance company for auto insurance and a separate, yet superb home insurance company for home insurance. That’s fine. If you prefer auto and home insurance at the same company, that’s fine too. You don’t need to bundle to enjoy savings from auto and home insurance. You may save more keeping the policies separate. Furthermore, this is a company you will trust with auto and/or home insurance. At least feel comfortable about the company and the agent.
Fair Comparison
A fair comparison of coverage, deductibles, provisions, and benefits are estimates where you enter the same information as the current policy. Visit three companies minimum and enter the same information at every company. If there are changes, add those changes to all company estimates. Compare auto insurance separate from home insurance. Review the quote tabulation too. Then, get a quote for bundling home and auto insurance at the desired companies. Determine which is better.
Price Optimization
Loyalty to an insurance provider can backfire. A method titled ‘price optimization’ raises premium payments yearly at a snail’s pace. As customers renew each year, the price goes up slightly. Providers will cover it up as a ‘loyalty discount’ when it isn’t. Over time, loyal customers pay more bundling home and auto than keeping them separate. It’s easier to stick with one provider rather than finding new insurance coverage each year, but searching for new coverage offer leverage for better rates. Conversely, insurance companies try to eliminate bundling benefits so loyal customers pay with no gain from it.
Never let pressure from an insurance company sway you to bundle. No matter what they say, the insurance company does not exist to save you money but to serve their interests. Serve your interests instead. Ensure home and auto bundling meets these qualifications first. Do additional research and ask questions if necessary. It’s your policy, and the monthly payments will come from your income. Make sure bundling is the best solution before signing the contract because you must honor it until the contract expires.
