Insurance should be simple. As long as you pay your premiums on time, you can expect your insurer to extend coverage according to your policy. If you are involved in an at-fault accident, your insurer will pay for damages and medical bills up to your coverage limits. Complicating the matter is the disparity between rates from one insurance company to another. They vary, often dramatically. This means consumers can save a significant amount of money by shopping around and comparing quotes.
There’s another easy method for saving up to 10 percent on your insurance premiums: bundling. By bringing multiple lines of insurance – car, property, life, etc. – under one company’s roof, you’ll typically pay lower aggregate rates. You’ll also enjoy a number of other benefits. We’ll describe them below.
One Bill = Less Time And Less Maintenance
Consider the way you currently manage your insurance coverages. You might have auto insurance with one company, property insurance with another, and life insurance with yet another. You may also have a supplementary health plan. You might maintain coverage for your business. If each policy is underwritten by a different insurer, keeping track of them requires more effort than necessary. Not only must you pay each company, but you’re also forced to maintain relationships with each.
When you consolidate – or bundle – your coverages under one insurer, you can make a single payment. This saves time and minimizes the effort involved.
Less Confusing Coverages For Your Car And Property
Suppose you have both auto and property insurance, but each policy is underwritten by a different company. Further suppose your laptop is in your vehicle when it is stolen. Under these circumstances, most people first call their auto insurer to file a claim for the loss. It is then that they discover their personal property is not covered by their auto policy. So, they call their property insurer.
Occasionally, property insurers balk at having to cover possessions left in stolen vehicles. Unless there are exclusions to that effect on your policy, this is usually a misunderstanding. That said, settling the matter may require time and several phone calls. When both coverages are held by a single company, the matter can usually be resolved with a single call.
Multi-Line Discounts From Insurance Companies
One of the most appealing benefits of bundling multiple lines of insurance is that doing so saves money. Many companies offer a multi-line discount to their policyholders. This means they’ll reduce your rates if you allow them to underwrite multiple coverages.
For example, if you already have auto coverage at your insurer, taking out a property insurance policy with the same company is likely to yield a discount. You might enjoy lower premiums on either line, or both. Depending on the company, such discounts may also be available when you consolidate life, health, and business insurance coverages.
Is Bundling Your Insurance Always Beneficial?
Even though there are distinct advantages to consolidating your coverages under a single company, there are potential drawbacks. For example, suppose you want to switch insurers. You would need to coordinate the transfer of several lines from your current company to the new one. Moreover, because each insurance company operates differently, you may lose some of your discounts following the transfer. Your rates might increase, even if your coverage limits and deductibles stay the same.
Another downside is that underwriting multiple lines of coverage requires more time since the insurer must take into account asset levels, deductibles, and many other factors. By contrast, a standard policy is relatively simple to create. It can often be completed online or over the phone.
One last note: don’t assume that bundling your coverages will save money. While doing so usually produces savings due to multi-line discounts, the only way to know for certain is to compare quotes from several insurers. Evaluate them side by side. It’s the only reliable way to find the coverages you and your family need at the best possible rates.