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Car and home insurance rates have increased this year. For auto insurance alone, we saw an average premium increase of 12.7% between 2023 and 2024, according to the November Consumer Price Index released by the U.S. Bureau of Labor Statistics. Many companies suggest bundling – meaning you buy your home and auto insurance policies in bulk from one provider – to save money.
Although the promise of reductions through bundling seems attractive, this route is not always worth it. We spoke with insurance professionals to help you determine when it might make sense to consolidate your insurance policies. They shared information on discounts, coverage options, and things to consider before bundling your policies.
Find out how affordable the right insurance policy can be here.
Should you bundle car and home insurance?
Experts agree that bundling home and auto insurance can offer valuable benefits.
“Discounts vary by company, but you can easily save 10% or more on each policy,” says Mike Barrett, co-director of Barrett Insurance Agency. Beyond monetary savings, grouping simplifies the management of your insurance with a single contact for all your needs.
Rajni Kapur, CEO of All Solutions Insurance, points out that insurance companies often view bundled customers as less risky. This could lead to attractive rates and terms. However, Michael Orefice, senior vice president of operations at SmartFinancial, reminds us that “in some cases, you can save more by using different insurers.”
Below, we’ll explore what bundling means and whether it’s the wise choice for your situation.
Learn more about the best coverage options available to you.
What Insurance Bundling Really Means
Insurance bundling involves combining multiple policies – usually home and auto insurance – from the same provider. Most insurance companies offer discounts ranging from 10% to 25% when you bundle insurance, depending on your state and the types of coverage you choose. While base premiums for home and auto have increased, Kapur notes that bundled discounts have remained stable.
When you consolidate your insurance, you’ll only have one bill to track and one insurer handling your coverage needs.
“Having a dedicated agent means you’re not calling a 1-800 number expecting good service,” says Orefice. Your agent becomes an ally who performs annual reviews and ensures you have solid coverage.
But remember that bundling also means that both policies are linked to one company. If you are not satisfied with the service or find better rates elsewhere, you will need to change services. both policies to bring about change.
When it makes sense to bundle auto and home insurance
Bundling insurance makes the most sense when you want simple, comprehensive coverage. If a storm damages your home And car, you will only have to work with one agent and file one claim. This simplified process saves you time and stress in an already difficult situation.
Many insurance companies treat bundled customers as preferred customers.
“[You may] enjoy loyalty benefits, such as reduced costs and [enhanced coverage options]”, says Kapur.
Finally, having all your policies from one provider means establishing a long-term partnership with an agent who understands your unique needs. If they spot any gaps in your coverage, they will suggest additional protection, such as umbrella insurance policies. This personalized attention helps ensure you get the right coverage at the best possible rates.
When it might not make sense to bundle auto and home insurance
Sometimes it makes more financial sense to separate your insurance policies.
“If you [have] dings or a DUI on your driving record, you can save money by purchasing car insurance from a specialty provider [offering] reasonable rates for high-risk drivers,” says Orefice.
Additionally, some homes and vehicles require specialized coverage that bundled policies cannot provide.
“If [you] own a high-value home or one located in a high-risk area (e.g. flood or wildfire zones), [you may need] specialized [homeowners] insurance [not available at] a carrier with competitive auto rates,” says Kapur. This also applies to luxury cars, antiques and collectible vehicles.
Even with a clean driving record and standard coverage needs, Kapur points out that separate policies could offer greater value. For example, she recently helped a family living in a wildfire-prone area find more affordable coverage by splitting their policies. They purchased specialized home insurance for their location while obtaining a separate auto insurance policy that offered better rates and accident waiver for their teenage driver.
The essentials
Deciding whether or not to bundle your insurance policies requires careful research. Barrett advises casting a wide net. Start by comparing auto quotes from multiple providers and asking each about their bundle discounts. Then do the same with home insurance companies. Although this process takes time, it could save you hundreds of dollars each year.
After purchasing insurance, don’t set it and forget it. Orefice suggests reviewing your coverage at least once a year. “If you see an increase in your insurance rates, it’s time to look around [and] see what others will offer,” he emphasizes.
