Whether you are living paycheck to paycheck, temporarily unemployed, or are just frugal, ways to reduce monthly expenses will undoubtedly be appreciated. One area where you may be able to make a difference and save some money is insurance coverage.
Many insurance companies offer various discounts and may include excellent savings if you bundle your home and insurance coverage. Bundling, simply, means purchasing multiple policies from the same insurance provider.
Typical policies combined in an insurance bundle might include home insurance, renters’ insurance, auto insurance, and even life insurance. It may include several same-type policies such as a car and motorcycle insurance bundle, or multiple policies bought by individual members of the same family.
While bundling insurance policies can add up to substantial savings yearly, it may not be for everyone. So, before approaching your insurance agent, consider these pros and cons to evaluate if it might be a good idea for your wallet, and eventual questions that you may want to discuss with your provider.
Benefits of Bundling Your Insurance Policies
While reducing expenses may be your primary motivation for considering bundling your insurance policies, there is more than one benefit to doing so. Here are some of the principal advantages of bundling insurance coverage.
Some insurance providers offer impressive savings, even saving over 15% when insurance policies are purchased from the same provider. This translates into considerable savings if you need to purchase more than one policy annually.
The Possibility of a Single Deductible
Some providers may merge deductibles meaning a claim will cost you less out of pocket.
You may be able to consolidate your payments for individual policies into one online account and payment method. This will also aid in not forgetting or missing payments.
If a problem arises with a payment or insurance claim, you’ll only have to deal with one provider rather than dealing with various companies. Imagine some damage to your home and auto due to the same cause, you won’t be dealing with two different providers for the same problem.
If you do end up placing a claim, your provider may label you high risk and might even cancel your insurance. If, however, you have more than one policy, they may be less likely to drop you.
Disadvantages of Bundling Your Insurance Policies
As with everything, there are some disadvantages to bundling insurance policies that may make it not in your best interest. Here’s what to investigate and consider before deciding.
Does a bundling discount really amount to savings?
While a provider may offer an attractive discount, if the policies themselves are among the most expensive on the market, you might save more with individual policies for more than one insurer. Compare the total cost of individual policies with the discounted cost of a bundle.
Some insurance providers may have great reputations for the method and rapidity with which they handle auto insurance claims but may not offer the same level of customer service when handling home insurance claims or life insurance claims.
If this is the case, you may be better off with individual policies from insurance providers known for excellent service for a specific type of coverage.
Policies with Affiliates
Insurance providers can offer bundles with other businesses, so it’s not a true bundle. You’ll be buying your coverage from an affiliate and not getting all of the benefits you might expect.
Other Reasons to Avoid Bundling Insurance Policies
- If you’ve had several auto accidents your risk factor will be higher and when bundling, this will influence your overall risk score.
- Your credit rating was lowered.
- A company with a bad history of paying out claims. They may offer a super deal to get your business, but then be lax about claim payouts.
Choosing to Bundle Insurance Policies
Sometimes one may decide to bundle insurance policies out of sheer convenience. Accepting a bundle package resolves a problem and saves you the time and trouble of having to shop around. But choosing to bundle for this reason is not necessarily in your interest.
It’s always a good idea to request quotes from various insurance providers both for single policies and an average bundle insurance cost to be able to compare before deciding. In this way, you’ll be able to verify who actually offers the lowest premium rates.
Discounts will be influenced by where you live, your insurance claim history, credit rating, and how many policies you bundle together among other factors.
Regardless of if you purchase single policies or bundle your insurance coverage, look for successful claims data and customer reviews. If a company has a great reputation for life insurance but a mediocre reputation for auto insurance claims, avoid the bundle and the auto insurance.
Protection is your goal, which entails finding the best coverage with great customer service at the lowest cost.
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