Are you looking to lower your insurance rates? If you need to buy more than one type of insurance, learn how bundling your auto with home or life policies can save you money on your insurance.
Bundling insurance refers to buying multiple kinds of insurance from the same company. By doing so, customers typically receive discounts ranging from 3 percent to 22 percent.
Why do companies offer such steep discounts? Customer turnover is expensive for insurers. Insurance companies want to keep their customers for as long as possible and want them to purchase multiple products from them. Giving loyal customers a lower premium enhances customer satisfaction and promotes long-term relationships.
In fact, a study by J.D. Power & Associates showed that 46 percent of consumers who bundled their insurance said they "definitely will" stay with their insurer versus 28 percent of customers who did not bundle their policies. If four or more policies were bundled, 66 percent of clients said they "definitely will" stay with their company.
Insurers can also find out more about consumers when they buy multiple insurance products. This gives companies a better idea of their claims history. Companies cannot use this extra information to increase your rates.
Similar to when you buy any individual product, you should shop around for bundled plans and compare quotes to get the best rates.
Besides receiving a discount, customers who bundle also benefit by not having to deal with multiple insurers, agents, and bills.
Here are a few additional tips to remember when bundling insurance:
Despite this, consumers may receive larger discounts in these high-risk states. If the natural disasters in the area generally affect one type of coverage, insurers will want to spread around the risk by offering more types of insurance coverage.
In addition, some states have strict insurance rate regulations that won't let companies give as substantial of a discount on bundled policies.
Look for rates for bundled insurance as well as individual quotes to find the best price. In general, bundled insurance rates are cheaper, but not 100 percent of the time.
A: In general, bundling insurance products is an easy way to save big on insurance. Don't bundle policies if your coverage is not adequate under the new bundled policy, or if you don't feel comfortable with the insurer.
And, as stated earlier, sometimes discounts offered on individual insurance products can end up being a better deal. The best way to find out is to shop around and get quotes from multiple insurance companies for auto, renters, home, health, and life insurance.
A: At face value, insurers lose money when they give large discounts to clients for bundling policies. On the other hand, companies end up making more money because they now have your business for multiple insurance products. Customers who bundle policies are also more likely to stay with their insurer for longer.
Another benefit to companies? They have a wider access to your background (e.g. they can see both your home insurance and car insurance claims) and can get a better sense of who you are. Rest assured, they cannot use this additional history to alter your rates.
A: Bundling more than two policies will give you the biggest discount. After that, your best bet is to bundle your home and car insurance. Customers who bundle can save more than $400 a year, and receive as much as 25 percent off their bill.
A: There are a number of discounts you can receive on different policies. For instance, many car insurers will lower your rate for using alternative fuel, being accident-free, or for being a good student. Here is an extensive list of discounts you can receive on your auto insurance.
Alternatively, you can save money on home insurance if you add home security devices like smoke detectors or dead-bolt locks. Protecting your house from natural disasters by reinforcing your roof or adding shatter-proof glass can also lower your home insurance rates.
A: States in the south tend to save the most. The top four states to save when bundling home and auto insurance are:
The four states with the least savings:
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