When you are shopping around for car insurance, you are usually asked whether you rent or own your home. Although your living arrangements may not seem to have anything to do with your car insurance, they do have an impact. Buying a home typically means saving money on your car insurance. However, as a responsible homeowner, you might want to apply the savings toward a more extensive auto insurance policy that protects your home.
The majority of car insurance companies offer discounts to homeowners. You are not required to have your home insured through the company to receive the car insurance discount. Insurance companies offer the incentives to homeowners because they are viewed as being more stable than renters. If you purchase a home after taking out your car insurance policy, notify the company to adjust your policy and receive the savings.
Combining your home and car insurance together through the same insurance company can save you as much as 20 percent. Look for insurance companies that offer a multipolicy discount when you bundle your home and car insurance. Purchasing policies separately or from different companies rarely saves you more money. If you have multiple cars, insure them under one policy with the home to maximize your savings.
Increased Liability Coverage
Once you become a homeowner, you might consider increasing your car insurance coverage to protect your greatest asset. If you cause an auto accident and do not have adequate coverage, the other party may sue you directly. As a homeowner, you now have something substantial to lose. Instead of opting for the minimum liability coverage, up your policy to reflect the value of your home. According to "USA Today," typical recommended coverage includes $100,000 per person in bodily injury coverage, $300,000 per accident in bodily injury coverage and $50,000 in property damage per accident. However, this is not enough coverage for everyone. The majority of insurance providers offer liability coverage of up to $1,000,000.
Proof of Ownership
The auto insurance company will likely require proof of ownership in order for you to receive the homeowner discount. Since the discount is significant, insurance companies want to verify you qualify. You may need to submit certain documentation to prove ownership, such as a copy of your property deed, mortgage documents or tax statement.
- Nationwide: Bundle Your Insurance Policies and Save With a Multipolicy Discount
- USA Today: Protect Your Family From Lawsuits Even If You Aren't Rich
- Esurance: Owning a Home Doesn't Affect Your Policy -- Debunking a Car Insurance Myth
- Insurance Information Institute. "What Is a Loss History Report?" Accessed Feb. 2, 2020.
- Insurance Information Institute. "Facts + Statistics: Homeowners and renters insurance." Accessed Feb. 2, 2020.
- Insurance Information Institute. "Understanding Insurance Deductibles." Accessed Feb. 2, 2020.
- Insurance Information Institute. "Homeowners Insurance Basics." Accessed Feb. 2, 2020.
Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.