Insurers often offer discounts for buying auto and home insurance through the same company. Sometimes thee’s even an extra discount if you buy a life insurance policy as well. All those discounts sound great but there’s more to consider.
Discount structures can vary from one geographic area to the next or based on insurer — but in many cases, you can save a fair amount of money overall. In other cases, you might not save as much as you might think.
Where a discount is available on both policies, expect the home insurance discount to be a bit larger than the auto insurance policy as a percentage. Often, the home policy is also the less expensive policy on an annual basis. If there’s a discount on home or auto when you buy a life insurance policy, that discount usually only affects other policies but doesn’t reduce the cost of your life insurance policy.
Some insurers offer a way to combine your deductible if both your home and car are damaged by the same risk, like a fire for example. That’s a nice benefit. Not all insurers offer this, though, and combined claims are comparatively rare. Usually you’ll have a home or an auto claim — but not both at the same time.
Is it apples vs. oranges?
Saving money is great but the most important thing is to be certain you don’t lose important coverages or have to accept a larger deductible.
Here’s an example. Let’s say your old home insurance policy has a $1,000 deductible. A new insurer offers a lower rate overall but only if you accept a higher deductible of $2,500. Deductibles often don’t get the attention they deserve but if you have a claim, that’s $2,500 you’ll have to pay out of pocket to get your home repaired.
There may be other differences in coverage as well. Auto policies are more similar to each other than home insurance policies so you aren’t likely to find as many variations in coverage. It’s still important to be sure the coverage amounts match up, however. With a home insurance policy, the way roof coverage works may make your old policy worth keeping. The same is true of wind and hail coverage. The details found in the small print can cost you thousands if the unexpected happens.
Often, the best move is to schedule a policy review with your agent or broker. Face to face, you can review your coverage and the advantages or disadvantages of bundling coverage with one insurer. Often, you’ll uncover ways to qualify for extra discounts as well. It also gives you a chance to customize your coverage to better meet the needs of your household. That personalized service is something that shopping based on price alone can’t provide.
