If you're looking for car and renters insurance, then going with an insurance bundle through a single insurance company can save you some hassle and even money versus looking around for separate insurance policies. When bundling insurance, you still get a wide selection of coverage options and can shop around for insurers with good prices and a positive reputation. You usually benefit from a customer loyalty discount with this option too. Take a look to learn more about these types of insurance, the pros and cons of bundling and the process for finding the right option.
The Basics of Insurance Bundling
When shopping for different insurance policies, you'll find that many insurers offer multiple products that you need. For example, it's common for major insurers such as Progressive to offer home and renters insurance coverage alongside car insurance, and you may even find medical, life, pet and travel insurance through the same place. Bundling insurance means that you pick at least two of the products offered through one insurer, and you pay for and manage your policies together through them.
One of the biggest appeals of bundling your insurance is that you usually get a discount that helps you save on both types of policies. For example, American Family Insurance mentions customers could get 20 percent off their home insurance and 29 percent off their car insurance when they bundle, but the amounts vary by insurer, customer and package. Insurance bundles also offer more simplicity and convenience, since you have a single contact point for issues, bill payments and policy documents. You can save time with the sign-up process too.
However, keep in mind that an insurance bundle might not always yield the best deal, especially if you don't do much research before signing up. Even with discounts, you might find that insurance rates vary by company. For example, if you have an expensive vehicle to insure, you may find that a different company offers cheaper coverage than the one offering the cheapest renters insurance. Also, if you decide to go with another insurer for just one of your bundled policies, you can lose your discounts, since you no longer have a bundle.
Looking at Auto Insurance
Since car insurance is usually part of state legal requirements and can offer substantial financial protection, it's an important part of your insurance bundle, and it's usually the more expensive part too. You can customize your auto insurance policy in terms of types of coverage, limits and deductibles, but you're basically getting financial protection for medical, property and liability. Typically, you renew every six to 12 months to allow for the insurer to reassess your risk and make pricing adjustments.
For the auto insurance portion of your bundle, you need basic coverage that covers bodily injuries and property damage to others for which you're liable as well as uninsured motorist and personal medical payments coverage. The downside is that such coverage won't pay for your sustained damages during at-fault accidents or incidents like theft and natural disasters. This type of coverage usually costs the least, so it might appeal to you if you're frugal and don't expect to get much money out of your vehicle.
For some extra money, you can get collision coverage and comprehensive coverage along with the liability component and have full protection. That way, if a hailstorm damages your car, someone steals it from your driveway or you slide into a tree, you can get reimbursed to have your vehicle fixed or otherwise receive compensation if the car's totaled. While states usually don't mandate it, you'll probably have to choose this coverage if you lease or finance your vehicle due to the agreement you signed with the lessor or bank.
Considering Car Insurance Pricing
Based on research from the National Association of Insurance Commissions (NAIC), drivers in the United States paid $1,005 on average for a year of car insurance coverage in 2017. This study featured a majority of drivers with comprehensive and collision policies, so it didn't reflect the lower cost that people who opt for liability-only coverage would pay. Your own car insurance pricing, bundled or not, depends on various types of information that's used to determine a driver's risk level.
For example, the insurance company looks at your driving record and past accidents and violations, your annual mileage, parking address, vehicle model, gender, credit score, age and the configured coverage. If you park on the street in a dangerous neighborhood, have a history of speeding tickets or are a new teen driver, then you can expect higher rates. On the other hand, if you've driven accident- and violation-free for 10 years, have a car that's inexpensive to repair or live in a location with low crime rates, you can benefit from lower rates.
Car insurance discounts also come into play and can help lower the price of this portion of your insurance bundle. Companies like GEICO look at factors like vehicle safety equipment, your affiliation with an employer or group, a safe driving history, student status and completion of driver's training when deciding which discounts you get. Other discounts may apply depending on how you pay for the policy, how you get your quote or how long you remain a customer.
Read More: How Much Does Car Insurance Cost?
Exploring Renters Insurance
In contrast to mandatory car insurance, renters insurance is more often a helpful but optional product to get, unless your landlord makes the coverage a requirement per your rental contract. Unlike homeowners insurance that covers both the building and what's inside, renter's insurance doesn't cover the apartment structure, since the landlord's insurance would cover that. Instead, it usually covers your personal belongings, liability for certain types of accidents and living expenses for when you get displaced due to a disaster like a fire.
Renters insurance can help you recover financially if someone gets hurt in your rental property or you lose expensive items like electronics and furniture due to theft or a disaster. However, there are limits to the various portions of the coverage. For example, you need to inventory your possessions and calculate the estimated value so you can choose an appropriate personal property limit. Also, try to maximize liability protection to avoid potential issues like lawsuits for others' medical bills.
The Insurance Information Institute (III) explains that renters insurance policies can have several exclusions, such as for floods, or require additional coverage for high-cost items like musical instruments. You should also keep in mind that the coverage might either pay the real cash value of your items or the replacement cost, with the latter option costing more but offering better peace of mind. Like with car insurance, a deductible normally applies when you file a renters insurance claim.
Read More: What Is the Purpose of Renters Insurance?
Considering Renters Insurance Pricing
The NAIC reported an average annual renters insurance cost of $179 in 2018, much lower than what people paid for car or homeowners insurance. However, keep in mind the coverage levels you choose for the liability and personal possessions portions of coverage plus your deductible amounts will affect renters insurance rates. Like with car insurance, the insurer also looks at characteristics you and the insured property have to determine the risk level and set rates accordingly, and policies renew at least annually.
For example, the property's type and location matter, because insuring an expensive rental home in a high-crime neighborhood would cost more than insuring a cheaper rental property in a low-crime area. The insurer also considers which security features the place has, what your credit score looks like and the policy configuration. You can expect to pay more with high limits, low deductibles, replacement cost reimbursement and add-ons for insuring any pricey or rare items.
Along with your bundling discounts, you have other insurance discount options to help with renters insurance costs. For example, Progressive mentions a 3 percent multi-policy discount along with other discounts for handling your renters insurance policy and payments online and renting a place with a secure entrance. The III mentions you could also get discounts for being a senior and having deadbolt locks and smoke detectors installed in the rental property.
Read More: Does a Renter's Insurance Claim Affect Your Rates?
Seeking Car and Renters Insurance Bundles
With major insurance companies, both existing and new customers can qualify for a car and renters insurance bundle by either signing up for both policies at once or having the second policy added later. Some insurance companies with this kind of bundle include the United Services Automobile Association (USAA), GEICO, Progressive, State Farm and Allstate. Most of these options cater to any kind of customer, but USAA is for military service members and their families.
Before proceeding with getting bundled insurance quotes, you should do some work to determine which coverage options you need and which discounts you're interested in, since this helps you narrow down your options. Make sure the insurers offer the coverage limits you prefer for renters insurance, as well as any add-ons you want for your auto and renters coverage. Also, keep in mind that the more policies you add to the bundle, the greater your potential to save might be.
Read More: Affordable Car Insurance: Best Options Per Category
Getting Bundled Insurance Quotes
To find the best home and auto insurance bundle, be sure to get insurance quotes to discover pricing and get an idea of what the insurance company might be like. You can start by going to the website for one of the insurers that interests you. There's often a page where you can get a quote for bundling insurance or starting a quote for either auto or renters insurance. Otherwise, you can call the customer service number for a phone quote or visit an insurance agent locally.
Regardless of the insurance quote method you use, have the right information handy for the process. This includes policy components, terms and limits as well as information about the rental property, car and yourself. For example, you'll probably need to answer questions about your driving history, the value of your possessions, the deductibles you want, any safety or security features on your vehicle and rental property and any characteristics that can determine specific discount eligibility.
Read More: What Are Car Insurance Discounts?
Choosing an Insurer for Bundles
After you've obtained quotes for bundling home rental and auto insurance, you can compare the results and see who provides the best rates and has the types of coverage you want. However, the III warns that you shouldn't just choose an insurer for your bundle based on the price alone. Make sure the place follows through if you have to make a car or renters insurance claim.
To avoid scams, choose an insurance company with state licensure, a high rating, helpful customer service people and a reputation for successfully handling customers' claims. If a place has a reputation for denying claims a lot or giving customers a hard time with the process, look for a different insurer.
Signing Up for an Insurance Bundle
Because you already gave the company a lot of information while getting quotes for insurance bundles, the official sign-up process doesn't usually take much more work. If you got online quotes, you can check your email for messages from insurers with links to continue the sign-up process. Otherwise, you can reach out to the insurance company by phone or visit with the agent you already worked with.
You might need to confirm and share some more information, but completing the process is often as simple as signing some forms, paying for the bundle and possibly sharing some documents associated with certain discounts. Keep in mind that you can save more by doing everything electronically through several major insurers. Once you're signed up, you'll receive materials, such as insurance policy declarations and cards, to have handy when the policy starts.
- Texas Department of Insurance: Shopping Smart: Tips for Buying Auto and Home Insurance
- Progressive: Bundle Home and Auto Insurance
- American Family Insurance: The Insurance Bundling Benefits Guide
- Insurance Information Institute: Auto Insurance Basics — Understanding Your Coverage
- Insurance Information Institute: What Is Auto Insurance?
- Insurance Information Institute: Facts + Statistics: Auto Insurance
- Insurance Information Institute: What Determines the Price of an Auto Insurance Policy?
- GEICO: Car Insurance Discounts - Savings on Auto Insurance
- Information Information Institute: Renters Insurance
- Insurance Information Institute: Your Renters Insurance Guide
- Insurance Information Institute: Facts + Statistics: Renters Insurance
- PolicyGenius: How Much Is Renters Insurance?
- Progressive: Get Affordable Renters Insurance With These Discounts
- USAA: Bundle and Save!
- State Farm: State Farm® Renters Insurance Discounts
- Allstate: Insurance Bundles and Discounts
- Insurance Information Institute: Choosing an Insurance Company
- Insurance Information Institute: What Information Do I Need to Give to My Agent or Company?
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- National Association of Insurance Commissioners. "NAIC Releases Report on Homeowners Insurance." Accessed July 28, 2020.
- Insurance Information Institute. "Facts + Statistics: Homeowners and renters insurance: Average Premiums For Homeowners And Renters Insurance, 2008-2017." Accessed July 28, 2020.
Ashley Donohoe has written about business and technology topics since 2010. Having a Master of Business Administration degree, bookkeeping certification and experience running a small business and doing tax returns, she is knowledgeable about the tax issues individuals and businesses face. Other places featuring her business writing include Zacks, JobHero, LoveToKnow, Bizfluent, Chron and Study.com.