Bundling renters and auto insurance
Fact-checked with HomeInsurance.com
In insurance terms, bundling refers to using one provider for different kinds of insurance. That means auto and renters insurance can be purchased from a single company, usually at a reduced rate.
Insurance companies want people to sign up for as many policies as possible, and providers will offer valuable discounts to entice potential customers. Taking advantage of those discounts can lead to substantial savings, especially for those who need insurance for multiple cars and rentals.
Renters and auto insurance are commonly bundled together because they intersect with a wide audience. Whether bundling makes sense depends on the individual and their insurance needs.
Through bundling, it’s possible to save money and reduce the hassle of working with multiple providers, but that isn’t always the case. We took the time to find out why it might (or might not) be a good idea to use one insurer for both renters and auto insurance.
Should you bundle renters and auto insurance?
“What is bundling?” remains a common question in the insurance industry. Whether someone should bundle their renters and auto insurance is a tricky question.
There are reasons it’s a good idea to bundle renters and auto insurance. However, those reasons won’t hold true for everyone.
When deciding if bundling is the right option, read over the policies for both the renters and auto insurance and terms of the bundle discount to see if it all makes sense.
Here are a few of the common pros and cons that come along with bundling insurance policies.
- Reduced cost: Insurance companies offer discounts to customers who sign up for multiple kinds of insurance. With bundling, people can get a reduced rate on both renters and auto insurance.
- Increased convenience: Insurance can be confusing, and working with multiple insurers—each with their own rules—can give anyone a headache after a while. Having one insurer usually means one point of contact and one set of rules.
- Stronger provider relationship: Insurers notice and appreciate when people sign up for multiple policies. Having that goodwill can come in handy if an accident occurs and a claim needs to be filed.
- Inadequate coverage: Although insurers will usually offer reduced rates to multi-policyholders, the coverages included in the policy may not match the insurance needs of the individual. Read over the policies closely to determine if they will be a good fit.
- Restrictive terms: The terms of an insurer’s auto insurance may be a perfect match, but the terms of their renters insurance could be a dealbreaker. Once again, make sure to read over both policies closely to ensure that they will provide the desired coverage.
Remember the basics
While bundling insurance policies is often encouraged, it’s not the right fit for everyone. Do your research and compare pros and cons to determine your best option.
How much can you save by bundling auto and renters insurance?
There is no universal formula for how much money will be saved when bundling auto and renters insurance. Every provider will offer its own discount for bundling—and that discount could change from person to person, depending on the specifics of the policy.
Generally speaking, it appears that people who decide to use one carrier for both auto and renters insurance can expect to save around 5 to 10 percent on average. For example, USAA advertises savings of up to 10 percent when bundling their policies.
One excellent advantage to bundling insurance policies is the single deductible, which some insurers, like Progressive, offer to multi-policyholders. A single deductible could be a lifesaver when filing multiple claims across different policies.
Just as there is no single formula for a bundling discount, the factors that determine how much a policyholder can save will depend on the individual and their circumstances.
In regions with many insurers and fierce competition for new business, the discounts could be higher to attract potential customers. However, if there are only a few providers who offer insurance products in the area, those providers won’t have the same incentive to offer large discounts for repeat customers.
How to bundle insurance policies
The first step in bundling insurance policies is taking inventory of your needs. Before looking for a new insurance provider, you should have an idea of the service and coverages needed to fit your lifestyle.
After getting a clear idea of what insurance will work, the next step is shopping around and getting quotes.
Although an auto insurer might also offer renters insurance and a discount for people who sign up for both, the renters insurance could be subpar and end up costing more over the long run through high deductibles or too many excluded perils.
The trick to finding the best combination of insurance policies is to not get too caught up in the discount. Instead, focus on the policy’s overall benefits.
If the auto and renters policies both have the desired coverages and the discount will reduce the cost of the premiums, bundling could be a good option. This should only be determined after getting quotes from at least three providers in the area to see how they match up.
Additional bundling options
Aside from auto and renters insurance, there are many other choices for bundling policies.
Home and auto insurance policies are commonly bundled together, and doing so can bring valuable savings. Many insurers offer these bundled policies at a rate that could reduce costs by $400 when compared to purchasing the policies separately.
Furthermore, some insurance providers give their customers freedom on which types of insurance they want to bundle. Companies such as Nationwide allow customers to bundle insurance for homeowner, renters, auto, life, motorcycles and boats.
- Bundles help to reduce insurance premiums.
- Don’t sign up for a bundle unless both policies are a good fit.
- Shopping for different quotes is essential for understanding the options available.
An auto and renters insurance bundle is a great way to get a few bucks off the premium, and some insurers offer substantial savings when people use them for multiple kinds of insurance.
Although insurers allow people to bundle and save, the policies may not be the right fit for the individual. It’s not a good idea to sign up for the discount—make sure the coverages and terms will serve your overall insurance needs.