Most people need more than one type of insurance. You can buy each type separately but that may not be the best option. By bundling insurance, you can enjoy savings and convenience. In this article, you will learn more about how bundling insurance works as well as what you can bundle.
How does insurance bundling work?
Bundling insurance may sound like a fancy concept but it’s simple: when you bundle your personal insurance, you simply buy multiple policies from the same company.
You can compare bundling insurance to eating at a food court. You could buy a sandwich from one restaurant, a drink at another and fries from a third but that would take up a lot of your time. Purchasing everything at one restaurant is easier. You might save money too since many restaurants offer deals on full meals.
Bundling your insurance is similar. Instead of receiving your homeowners’ insurance from one broker, your auto insurance from another and your boat insurance from a third, you can secure all your insurance policies from the same broker.
What can you bundle?
The two most common bundles are home with auto insurance and renters with auto insurance. Everyone needs either renters’ or homeowners’ insurance and anyone who owns a car needs auto insurance so combining these two coverage types makes sense.
You might be able to bundle other types of insurance as well. For example, if you have a boat, you can talk to your insurance broker about bundling boat insurance with your auto and home insurance. You might also be able to bundle individual policies for expensive items like art and jewelry. Plus, if you want extra liability coverage for your home, car or boat, you can bundle umbrella liability insurance. Finally, some insurance companies also offer life insurance that you can add to your bundle.
In other words, bundling comes down to what type of insurance you need and what your insurance company offers. The best way to find out what you can bundle is to talk to your insurance broker.
Benefits of Bundling Coverage
There are four important ways you could benefit from bundling your personal insurance policies, especially your home and auto policies.
You May Qualify for Home and Car Insurance Premium Discounts
This is the biggest reason people bundle their insurance. Most companies will give you a discount when you buy multiple types of insurance from them.
Policyholders tend to look for easy ways to save without sacrificing coverage. Bundled insurance discounts are one to explore.
Bundling Home and Auto Insurance Is Convenient
Convenience is the second most common reason for bundling insurance. When you bundle your personal insurance, you only deal with one company, which means less paperwork and fewer contacts. You might even receive a single bill and be able to access all your policy information from the same app or website. This makes managing your insurance coverage less of a hassle.
Bundling can also be convenient if you have a claim. For example, imagine your laptop has been stolen from your car. You’re confident your insurance will cover the theft but you’re unsure whether it falls under your homeowners’ insurance or auto insurance policy. If you bundle your coverage, you only have to deal with one insurer rather than two. Since car insurance does not typically cover theft of personal belongings, you’re more likely to have coverage under your renters’ or homeowners’ insurance policy.
You Might Be Able to Combine Auto and Home Insurance Deductibles
Let’s say a massive storm damages the roof of your house and floods your car. Thankfully, your homeowners’ insurance will cover the damage to the roof and your comprehensive car insurance will cover the damage to your car. The only problem is you’re responsible for the deductibles. Your homeowners’ insurance deductible is $5,000 and your auto insurance deductible is $1,000. You opted for high deductibles because this resulted in lower premiums and you were confident you could cover $5,000. However, you never expected to have two claims at once and now you have to pay $6,000 and it’s not going to be easy.
Bundled insurance could help in some situations like this. The National Association of Insurance Commissioners (NAIC) says some insurance companies offer combined deductibles, giving you one deductible for multiple policies when losses are caused by the same event. This means you only have to pay once instead of twice, which could make a big difference when you’re recovering from a major loss.
You Can Build Strong Relationships with One Broker
The average person might not spend much time thinking about the relationship they have with their insurance company, but this relationship can be important. After all, if anything goes wrong like a fire, theft or crash, you’ll need your broker to help you get the necessary coverage for your needs. When you bundle your insurance with a single broker, you strengthen your ties.
Bundling Business Insurance
Just as bundling personal insurance policies can offer significant advantages, bundling commercial insurance is also a highly beneficial option for businesses. By bundling multiple insurance coverages such as general liability, property insurance, business interruption and workers’ compensation into a single comprehensive package, businesses can enjoy several key benefits.
Firstly, bundling commercial insurance policies often results in cost savings through lower premiums, as insurers frequently offer discounts for multiple policies. Additionally, managing a bundled insurance package is more convenient and efficient, reducing the administrative burden of dealing with multiple policies and providers. This efficient approach ensures that all aspects of your business are adequately protected under a cohesive strategy.
Is bundling always the right option?
Bundling can be the best, most convenient and affordable option but it isn’t always the right way to go. Sometimes, having your home and auto insurance policies with separate insurance companies is worth the extra hassle.
First, bundling your home and auto insurance coverage isn’t always less expensive. Although the bundling discount can be significant, there are other factors to consider. Insurance companies typically use a lot of the same factors when they carry out the underwriting process to determine your insurance premium, but they might weigh factors differently. For example, speeding tickets can impact your rates but Insurance Company A might increase your insurance premium much more than Insurance Company B. However, if you also have wildfire exposures, Insurance Company B may charge you high rates, whereas Insurance Company A may be more reasonable. In a situation like this, bundling might not make sense.
It’s also possible that one insurance company might offer options you want for a single coverage line but not all the policy types you need. For example, you might like the telematics auto insurance program one insurance company offers but that insurance company may not offer the other insurance products you need, meaning you’ll need to buy your homeowners’ insurance elsewhere.
Should you bundle your personal insurance policies?
Bundling your personal insurance policies isn’t always the best option, but it’s certainly worth considering. At the very least, you can receive some quotes to see whether the discount would make it worthwhile.
Do you want to find out if bundling your personal insurance could save you both money and time? Higginbotham can help you compare your options. Get connected to one of our personal insurance specialists today.
