How to Save Money by Bundling Home and Car Insurance 2021

Last modified: May 24, 2021

If you’re like most of us, you’ve been looking for innovative ways to reduce your expenses. Usually, this means making sacrifices, but not always. With one simple trick, Americans save an average of 16.1% every month. 

What is the trick? 

They bundle home and car insurance with the same company to get a better deal. Learning to do so yourself could potentially save you thousands of dollars over your lifetime. If you’re living paycheck to paycheck, that can make a significant difference. 

Would you like to know how to apply this trick in your life? 

If yes, then read on. In this post, we’ll look at how to save by bundling auto and home insurance

What Is Bundling?

Bundling is simply taking various insurance products from one company. Instead of insuring your home through one business and your car through another, you put them under one firm. 

How does bundling insurance save money

Bundling car and home insurance usually comes with a discount on one or both policies. Insurers put a bundling discount in place to reward clients for having all their products with one firm. 

Bundles may extend to other products within the same firm, such as: 

The company can offer a better deal because each policy locks you in a little. You might be willing to change your auto insurance quickly, but it’s inconvenient to look for two or three new policies. 

Benefits/Pros/Cons

How much does bundling insurance save you? The answer is more complex than you might think. The multi-policy savings depend on the company, your credit record, and how well you drive. 

Someone with a stellar credit history and a spotless driving record can gain the most. Those on the opposite end of the spectrum might find that bundling increases their premiums.   

Before you decide to bundle home and car insurance, let’s look at the pros and cons. 

Pros

  • Savings on your monthly premium: You could save between 5% and 29%, depending on the company. 
  • You may benefit by having a single deductible: It’s best to check this when you ask for a quote because it’s not always true. In some cases, the company merges the deductibles. You might, therefore, pay less out of pocket. 
  • Convenience: If you need to make updates to your address, you’ll only have one company with which to deal. Any queries or management issues you may have will go through one firm. 
  • Better Security: Insurance companies may “fire” clients that they feel are too high-risk. If you have too many claims, for example, they may decide the premium isn’t worthwhile for them. If you have more than one policy with them, dropping you becomes more difficult. 
  • Saves Time: Only having to deal with one company saves you time when you’re in a rush. 

Cons

  • Focus on Discount: It’s easy to get caught up in the amount that you’re saving. You might, therefore, overlook essential terms and conditions. 
  • Competition Avoidance: You might also be so focused on the discounted price that you assume it’s the best offer. A multi-policy deal may be a bad thing if it stops you from shopping around.
  • Affiliates: Some companies provide deals in conjunction with other businesses. If this is the case, it’s not truly a bundle. Instead, you’re buying your coverage through an affiliate. Both policies will operate separately, so you’ll have none of the convenience you expected. 

Companies Offering Home and Auto Insurance Bundles

Where will you find the best homeowners and car insurance bundle? That depends on what you’re looking for in your plan. We scoured home and auto insurance bundle reviews to identify the top companies offering this product. 

We obtained homeowners and auto insurance bundle quotes to see which provides the best deal. We took quotes for a person with a reasonably good credit rating and clean driving history to obtain our estimates. The results are in the table below. 

 

Company Average Home Insurance Cost Per Month Average Auto Insurance Cost Per Month Discounts for Bundling Average Premium for Both with Separate Policies Average Premium 

When You Combine Policies

Amount You Can Save per Month
Allstate $140 $198 Up to 25% of home and 10% off auto $338 $283 $55
American Family $100 $115 Up to 20% off home and 29% off auto $215 $161.65 $53.35
State Farm $133 $124 Up to 17% overall $257 $213.30 $43.69
Progressive $150 $130 Up to 12% overall $280 $246.40 $33.60
GEICO $116 $105 Variable $221 Varies Varies

 

The average American paid $1,430 in auto insurance in 2018. Had they taken advantage of the savings we’ve detailed above, they could have saved between $171 and $414.70 for the year.

How to Bundle Home And Car Insurance

Many companies are willing to provide multi-policy discounts to retain your business. The more business you conduct with the firm, and the more coverage you have, the more valuable you are to the firm. 

Products like renters insurance, which are already inexpensive to begin with, won’t benefit much from these deals. Bundling auto and home insurance here won’t reduce your home premium significantly. Your auto insurance, however, should drop nicely. 

Is Bundling Insurance Worth It

Nine times out of ten, it will be. If you’re paying a lot for your home insurance and less for your vehicle, you’ll benefit the most. 

There are cases when auto coverage becomes the more expensive policy, for instance, if you have accidents or tickets, poor credit, or live in a state with high car insurance rates. In this case, the savings from choosing the cheapest car insurance company could dwarf a 20% discount on a bundled home policy. 

Should I Bundle Home and Auto Insurance?

Combining your policies is convenient and may save you money. It’s worth investigating your options. You should bundle when you have a reasonably good credit history and a decent driving record. Get quotes from several companies and see whether it’s worth switching your insurance. 

When Should I Keep the Coverage Separate?

You shouldn’t combine your coverage if: 

  • Your credit rating has dropped: Stay where you are and work on improving it over the next six months. 
  • You’ve had a few auto accidents: A car accident, whether you caused it or not, impacts your risk profile. If you combine your policies, the insurer gives you an overall risk score. Those driving incidents will affect the way the insurer sees you. 
  • You’re not sure of the company’s stability: A struggling firm might offer outstanding deals to secure your business. Before signing on, check that the company has a good history of paying claims. You do not want both your policies with a firm unable to payout. 

Tips To get the best possible bundling discount

  • Check who the insurers you’re dealing with are. Will the cover be provided by the same company or by the firm and affiliate? If the latter, is it a good idea to bundle home and auto insurance when you know little about the affiliate or its history? 
  • Shop around for quotes before you bundle homeowners and car insurance. Ask for standalone and multi-policy quotes so that you can see if combining the coverage is worthwhile. 
  • Don’t get complacent with one insurer. Set aside time at least once a year to review your contracts. Repeat the process of asking for standalone and bundled estimates. Get the estimates in writing as a bargaining tool. If your existing insurer doesn’t sweeten the deal, move on.  

 

Pros & Cons

The Pros

  • You could save between 5% and 29%, depending on the company. 
  • You may benefit by having a single deductible
  • Convenience.
  • Better Security
  • Saves time.

The Cons

  • Competition Avoidance
  • Too much focus on discounts.
  • Some companies provide deals in conjunction with other businesses

Final Verdict

In most cases, choosing to bundle home and car insurance makes sense. Companies are generally willing to discount your premiums if you hold more than one product with them. The discounts may range from a mere 5% to a large discount of almost a third off. 

It costs nothing more than a little time to get quotes from various companies. Shop around and compare bundled rates with unbundled ones to ensure you make the right decision. 

If you don’t see much of a difference, consider checking your FICO score, claims record, and driving record. Excessive claims, a low FICO score, and traffic incidents all count against you. If this is the case, aim to improve these issues over the next six months and try again. 

FAQs

In what cases is it better not to bundle home and auto insurance?

If you have bad credit, traffic violations, or reside in a state where insurance rates are high, it may work out better to have separate policies.  To be sure, shop around – ask for bundled rates and standalone policies. 

Can you bundle renters and auto insurance?

Yes, you can bundle the two. Whether it’s a wise idea depends on your credit rating and driving record. 

How much can you save if you bundle home and car insurance?

The average person saves 16.1% overall. That equates to $16 per $100 premium that you pay. It doesn’t sound like much in one month, but it adds up. Over a 10-year term, you’ll save $1,920 without reducing your coverage. 

Who has the best home and auto insurance bundle?

American Family provides outstanding value for money along with a sizeable discount of up to 29%. As always, it pays to do a little more research on your own before settling for one plan or the other.