Imagine pocketing an extra $243 per year by combining your car and home insurance with the same insurance company. It’s not a scheme. In 2011, the average homeowner in Arizona who purchased both home and auto insurance from the same insurance company saved more than 16 percent on premiums. If the idea of saving more money and spending less time on insurance sounds appealing, continue reading to learn more about how you can quickly simplify and save with bundled car and home insurance.
Why Offer Savings for Bundling?
Every insurance company is different. Each has its own formula for evaluating risk and calculating the amount of premium to collect from its policy-holders. Some insurance companies offer lower rates to specific customers, such as those who live in a low-risk neighborhood or those with a good driving record. When a customer meets the first criterion but not second, the quoted rates for auto coverage may not be as competitive as the homeowner’s quote. A bundling discount may be offered to customers who purchase both policies from the same provider. In many cases, the discount provides greater savings on the combined policy rate than a competitor could offer on a single line of coverage.
The savings will vary for each person depending on a number of factors. According to the Insurance Information Institute, the average person can expect to save between 5 and 15 percent on premiums when purchasing car and home insurance through the same provider, although some insurance companies tout savings of up to 20 percent when you bundle several lines of coverage.
The Two Ways to Save
Though discounts and policies vary between insurers, there are two basic ways of saving with combined coverage. The first is through purchasing two separate lines of insurance through the same carrier, making you eligible for a multi-policy discount. This is the simplest way of saving, as each policy remains separate from the other. The discount may be applied evenly among the premiums or individually to one policy, such as your auto insurance. So long as you maintain both lines of coverage, your multi-line discount continues to apply. Switching one type of insurance to another company would forfeit your discount.
The other way of saving is by bundling all of your insurance needs into a single package policy. Insurance packages can be a convenient way to combine all of your premiums into a single bill. The eligibility guidelines for an insurance package are different from carrier to carrier, but customers who qualify may benefit from higher levels of coverage not available from individual policy lines.
For example, an insurer who offers a maximum of $3 million for umbrella liability insurance may extend that coverage to $4 million if you have a package policy. In addition to home, auto and umbrella insurance, other coverage can be added to a package policy, too. Talk with an independent insurance agency like the Vanyo Insurance Group to find out more about package insurance and whether it could be right for you.