Bundling policies can offer a great deal on your insurance premium. In fact, getting two or more policies from the same insurance provider can sometimes mean discounts of as much as 25%. While it’s often true that getting two or more policies from the same company will mean savings, bundling may not always save you the most money. While it can be easier (and cheaper) to use the same insurance company for both policies, it may not be the best option for every policyholder. Let’s take a look at some of the situations where bundling and not bundling insurance policies can save you more money.
How bundling can save you money
Insurance companies that offer bundling tend to give a five to 15% discount on each policy. Homeowners insurance typically gets the biggest discount since your home’s value is likely far greater than your car’s. Bundling your home and auto insurance policies typically makes the most sense if you’re currently paying a much higher home insurance premium than on your car insurance. In any case, it pays to shop around to make sure you are getting the best deal for the coverage you require. Plus, bundling usually offers the convenience of only having to be billed by one insurance company. Some providers may even require only a single deductible under a bundled policy if both your car and home are damaged in the same incident, such as a fire.
Advantages of bundling your insurance policies
When you bundle your insurance, you will have multiple insurance policies with the same company. Some advantages to bundling your insurance include:
- Receiving a better discount. You will pay less on all protection that you add to your policy.
- Dealing with one insurance company. Knowing who to call with questions, concerns, or if you need to file a claim, is reassuring.
- Combining your bills and payment statements. Make one easy payment. You’ll get one package in the mail and one payment schedule for both premiums.
- You can have a single deductible.
- You can more easily identify any coverage gaps.
- Bundle your policies, even with different renewal dates. You can add your second policy in advance of the renewal date and lock in the quoted premium.
Advantages of not bundling insurance policies
“Bundle and save” is a common catch phrase used in the consumer world; everything from phone plans to hair products are sold in sets designed to bring you savings. But it’s not always the most cost-effective way to go when it comes to choosing insurance providers. There are pros and cons to bundling—and a lot depends on your personal situation.
However, there are several instances where bundling may not offer you savings:
1. Recent lifestyle changes
Looking into alternative discounts outside of bundling is an especially good idea if you have gone through a recent lifestyle change that can impact your insurance. For example, getting married (or divorced), having kids, or changing your commute, may impact your insurance premiums. There may be an insurer out there that offers discounts for your particular lifestyle.
2. Reduction in coverage
Discounts associated with bundling your policies may seem desirable. However, always be sure to compare not only the price, but the coverages included. Failing to do this may be a shock later on if you have to put forth a claim on your new policy. You may unknowingly sign up for a new policy with lesser coverage. When it comes to filing a claim, it can cost you more out-of-pocket. When looking to bundle your policies, it is crucial to ensure that you are retaining the same level of coverage as before.
3. High car insurance premiums
Your current car premiums may be high for a variety of reasons; poor driving record, collisions, speeding tickets, high-risk vehicle model, etc. In this situation, you are better off shopping around for providers that offer the cheapest insurance, rather than bundling your home and auto together.
Some companies strive to build loyalty, which means you’ll continue to receive a discount. Other companies will continue to offer you a “discount,” but may slowly raise the cost of your plans.
4. Convenience = complacency
Bundling all your insurance needs with one provider is convenient. After a while of having a policy with the same insurer, you may find that it no longer meets the needs of you and your family. Additionally, it may be that even though you are still receiving a discount for bundling your services, your premiums may be rising. Meaning, this is good for the company, but not so good for you. While the company may keep your business, they may no longer offer the best rate. If you are looking for ways to save on auto insurance, please click here.
5. Affiliates
You might also find that the bundled plans you buy don’t end up being through the same insurer. Some companies use affiliates. You will lose the ease of having only one company to work with, though. And if the affiliate relationship ends, you might need to shop around again or face a steep rate increase.
6. Compare quotes for bundled coverage
If you are deciding to shop around for your car and/or home insurance policies, make sure to compare quotes for bundled policies, as well as separate ones. You may find separate policies are cheaper than the bundled rate available to you. Or, you might find that it’s substantially cheaper to bundle. It’s all about weighing the pros and cons.
7. Cost
Make sure you research the cost of policies before you start looking into bundling discounts to save the most money. It may be possible to find more than one provider with the same coverage and lower prices. This research can add up to less than the total cost of a bundle with a different company.
Is not bundling insurance policies the right move?
Many will have you believe that bundling your policies will always save you the most money. But is this actually always the case? The short answer is – mostly, yes. Often bundling your policies together with the same company can save you an average of 15% overall. Whether you’re putting multiple vehicles on an auto policy, or combining your home, auto, cottage, RV, motorcycle and/or life insurance policies, bundling has its advantages. However, bundling may not always be in your best interest, as there are a number of exceptions to the rule, preventing your from obtaining the best deal on your coverage. If you have two great policies with separate insurance providers, it may be in your best interest not to bundle.
At isure, we have access to many different insurance companies across Ontario. Your dedicated insurance broker can find you the best policy and package that will suit your insurance needs. Insurance companies will offer different packages and discounts, which can be time consuming if you look for a bundle by yourself. With isure by your side, we’ll go through all of our isure-approved insurers to find the best bundle offers available at the lowest rates.
