Last updated: September 2022
When it comes to saving money, people love to look for package deals. But did you know that it isn’t just internet, cable, and cell phone plans that you can bundle together? A lot of insurance companies can offer you the opportunity to “bundle” insurance coverages! Why might you consider grouping policies? Does bundling insurance save money? Keep reading to learn about the benefits of bundling insurance products and policies.
Does Bundling Insurance Save Money?
One of the main reasons people choose to bundle coverage is because it typically saves them money. How much do you save bundling insurance? Well, it depends, but when you consider that an individual may need auto insurance, renters or homeowners insurance, and life insurance, the savings can be substantial.
The latest data available (2019) from the National Association of Insurance Commissioners (NAIC) had the average annual auto insurance premium in the United States at $1,204. For homeowners insurance and renters insurance, the NAIC had the 2017 figures at $1,211 and $180, respectively. Regarding life insurance, Business Insider put together an article with data from S&P Global. The findings? Across all different types of life insurance, the average annual cost ranges from $473 to $671 depending on the type of life insurance you purchase.
Even if your premiums are slightly cheaper than the averages above, saving a certain percentage (depending on your insurer) by bundling coverages could save you hundreds of dollars each year.
For example, Direct Auto Insurance offers a multi-product discount if you purchase an additional qualifying product alongside your auto coverage, like term life insurance, roadside assistance, or an emergency protection plan.
Or, if you purchase two or more of the following policies, you could be eligible for Direct’s multi-policy discount.
- Auto Insurance
- Commercial Auto Insurance
- Motorcycle Insurance
Do you have multiple vehicles in your household? Insuring some (or all of them) under one policy could help you land a multi-car discount on your auto insurance*. No matter what percentage you shave off your premium, that’s extra money to save, invest, or use for your next vacation! Also, you could potentially use your savings to add additional coverage to your policy.
Is Bundling Insurance More Convenient?
Saving money isn’t the only reason to consider a multi-product discount. When you bundle auto, life, or other coverages, you can streamline your insurance experience. Instead of having to deal with multiple insurers for your different policies, you can consolidate down to one company or one family of companies. Imagine being able to open one app on your phone or log in on one website to make a payment or ask a question regarding any of your policies. Say disaster does strike. If you’re already in a stressful situation, having to deal with the hassle of filing multiple claims with multiple companies could cause you to become even more overwhelmed. By having your policies consolidated through a single organization, you might be able to avoid some of these headaches. Everything will be in one place, and for some people, that brings peace of mind that is almost worth as much as the actual monetary savings.
Should I consider shopping for multi-product or multi-policy discounts?
After reading the sections above, you might be ready to call your insurance agent(s) and talk about multi-product deals. Those conversations are worth having, but before you do, it’s worth noting that bundling might not always be the best option, or it might not be an option if your insurer doesn’t offer certain coverages in your location. If you’re trying to decide on whether you should bundle coverages or not, here are some helpful tips.
Evaluate your needs.
Before you start talking about bundles with an agent, think about which coverages and the amounts of coverage you actually need. For example, if you rent a small apartment and don’t have very many valuables, you might not need as much renters coverage as someone else. If you have an older car, you might only be interested in liability coverage. An agent can help answer specific questions for you, but having a general idea of your wants and needs is a good starting point. This will prevent you from paying extra for something you don’t need or want and potentially save you even more in a bundle deal.
Talk to an agent.
After you’ve evaluated your needs, it’s time to talk to an agent. First, make sure they offer the coverages you need. After that, with the knowledge you have, you’ll be able to determine if you’re getting the deal you desire. Ask any outstanding questions about coverage types or amounts. If you’re satisfied after researching, shopping around, and talking to an agent, the bundle might be the best option for you.