It makes financial sense to look for ways to save money on insurance. Since many insurance companies provide a discount for bundling policies—combining more than one type of insurance with the same company—it may be a good way to cut costs. But before you make that decision, consider these pros and cons.
What Is Bundling?
Bundling insurance means you have multiple policies in place with the same insurance company. For instance, if you already have a car insurance policy and then purchase renters insurance from the same company, you may be eligible for a bundle discount, also known as a multi-policy discount.
Pros of Bundling Auto and Renters Insurance
Bundling offers many benefits, including potential savings. Let’s take a look at why you might consider bundling your renters and auto insurance.
Bundling Could Save You Money
Many insurers offer a discount when you combine your auto and renters insurance policies. The amount of money you could save depends on many factors, including:
Your insurance company and/or underwriterThe amount of insurance coverage you need Your state
Check with your insurance agent to see if you’re eligible for a bundle discount and how much you could save. Here’s a look at how much you may be able to save with five different insurers. There’s only one set of login information to remember to manage all of your policies online. And, if there’s ever a problem, you know exactly who to call without having to remember which insurance company provides which policy. In a high-stress situation, like when you’re filing a claim, this convenience can offer peace of mind.
Your Agent Gets To Know Your Insurance Needs
When your agent has access to all of your policies, they can more easily see any gaps in coverage. This bird’s eye view can make them better equipped to help you get the insurance you need to be fully protected.
Cons of Bundling Auto and Renters Insurance
Even though bundling your auto and renters insurance has many benefits, it isn’t the right move for everyone. Here are a few of the downsides of bundling.
The Savings Might Not Be Worth Switching Insurers
Renters insurance is generally pretty cheap, often around $12 a month for $30,000 worth of coverage. Since a renters policy is already fairly inexpensive, bundling it may not offer the same potential savings as a higher-priced homeowners policy might. These savings may not be worth the hassle of switching to a new insurer, especially if you like your current provider and policy terms.
It Could Stop You From Shopping Around
By bundling your renters and car insurance together, you’re sticking with the same company. Because of the added convenience, you may not take the time to shop around regularly for different insurance options. This means you could be missing out on lower rates from another company.
Bundling Your Insurance May Be Time-Consuming
Since your eligibility for bundling discounts depends on so many factors, you may not be able to get an instant quote that reflects these savings. You may need to speak with an agent and provide information before getting a quote for bundled insurance, which may take additional time.
Does Bundling Make Sense for You?
Now that you’ve weighed some of the pros and cons about bundling your auto and renters insurance, you get to decide if bundling makes sense for you. To help you make the decision, compare quotes from different insurance companies for both stand-alone policies and bundled ones. If you decide to bundle your insurance, don’t put your coverage on autopilot. The amount of coverage you need and the rates that companies offer change over time, so don’t set it and forget it. At least once a year, take time to review your insurance policies and consider your other options.
