How much can I really save by bundling my insurance?
The math has changed. A look at when bundling still pays and when splitting carriers gives you a better number.
Most people bundle or combine their insurance coverages to receive a discount.Most people bundle or combine their insurance coverages to receive a discount. Insurance companies encourage this practice because the more products you have with one company, the longer you stay with them. However, it’s not always easy to move an entire insurance portfolio. Cars are relatively easy to move, and many people do it every few years. Homes, on the other hand, are a bit tougher because the payment is usually bundled with your mortgage payment and property taxes. The discount on the home is usually larger than the discount on the cars.
Currently, I offer a 25% discount on the price of home insurance when I write the house and cars together. I’ve seen it save over $1,000 regularly. The catch is when someone moves the cars but doesn’t switch the home over because of the perceived hassle. Guess what happens? The home then increases by the amount of that foregone discount at renewal.
This is why you’re seeing so many insurance companies offering banking products and financial services like mutual funds and education savings accounts. It makes sense to keep your insurance with one company if possible. My advice is to keep it together. If you move one product, move everything. Make sure you ask how much your home insurance will go up if you move your cars — that’s critical, because the increase in your home premium will most likely offset any savings you get by switching auto insurance.