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Auto and homeowners insurance rates have skyrocketed this year. For motor vehicle insurance alone, we have seen an average premium increase of 12.7% between 2023 and 2024, according to the November Consumer Price Index published by the U.S. Bureau of Labor Statistics. Many companies recommend bundling (which means buying your home and auto policies in a bundle from one provider) to save money.
While the promise of discounts through bundling sounds appealing, this route isn’t always worth it. We spoke with insurance professionals to help you determine when it makes sense to bundle. They shared insights on discounts, coverage options and what to consider before bundling your policies.
Discover here how affordable the right insurance can be.
Bundling car and home insurance?
Experts agree that bundling home and auto insurance can provide valuable benefits.
“Discounts vary by company, but you can easily save 10% or more on any policy,” says Mike Barrett, co-president of Barrett Insurance Agency. In addition to monetary savings, bundling simplifies your insurance management with a single point of 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 can lead to attractive rates and conditions. However, Michael Orefice, SVP of Operations at SmartFinancial, reminds us that “in some cases you can save more by going with different insurers.”
Below we explore what bundling entails and whether this is a smart choice for your situation.
Learn more about the best coverage options available to you.
What insurance bundling really means
Insurance bundling means combining multiple policies (usually home and car insurance) with the same provider. Most insurance companies offer discounts ranging from 10% to 25% when you bundle, depending on your state and the coverage types you choose. While basic premiums for homes and cars have increased, Kapur notes that bundle discounts have remained stable.
When you bundle, you have one bill to keep track of and one insurer to handle your coverage needs.
“If you have a dedicated agent, you don’t have to call a 1-800 number hoping for good service,” Orefice says. Your agent becomes an ally who conducts annual reviews and ensures you have solid coverage.
But remember: bundling also means that both policies are tied to one company. If you’re not happy with the service or find better rates elsewhere, you should switch both policies to bring about change.
When it makes sense to bundle car and home insurance
Bundling insurance makes the most sense if you want simple, comprehensive coverage. If a storm damages your home And car, you only have to work with one agent and file one claim. This streamlined 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 lower costs and [enhanced coverage options]” says Kapur.
Finally, having all your policies with one provider means you’ll build a long-term partnership with a broker who understands your unique needs. If they discover gaps in your coverage, they will suggest additional protections, such as an umbrella policy. This personal attention ensures that you have the right coverage at the best possible rates.
When it may not make sense to bundle car and home insurance
Sometimes it makes more financial sense to keep your policies separate.
“If you [have] dings or a DUI on your driver’s license, you can save money by purchasing car insurance from a specialist provider [offering] reasonable rates for high-risk drivers,” says Orefice.
Additionally, certain homes and vehicles require specialized coverage that bundled policies cannot provide.
“Like [you] own a home of high value or a home located in a high-risk area (for example, flood or wildfire zones), [you may need] specialized [homeowners] insurance [not available at] a carrier with competitive car rates,” says Kapur. This includes luxury cars, antiques and collectible vehicles.
Even with a clean driving record and standard coverage needs, Kapur emphasizes that there are separate policies could provide greater value. For example, she recently helped a family in a wildfire-prone area find more affordable coverage by splitting their policies. They purchased specialized home insurance for their location, while purchasing a separate auto policy that provided better rates and accident forgiveness for their teenage driver.
The bottom line
Deciding whether to bundle your insurance policies requires careful research. Barrett advises casting a wide net. Start by comparing car quotes from different providers and ask each about their bundle discounts. Then do the same with home insurers. Although this process takes time, it can save you hundreds of dollars every year.
Once you take out insurance, you don’t have to forget about it. Orefice recommends reviewing your coverage at least once a year. “If you see increases in your insurance rates, it’s time to shop around [and] see what others have to offer,” he emphasizes.
