Bundling is a common practice in the retail industry. But, what does it mean and is it worth it? Bundling is a term businesses use to offer two or more of their products or services to customers at a discounted rate. Most times, the value of the bundled products is not worth the advertised deal. When it comes to insurance, however, securing auto and homeowner’s policies with the same company is something worth thinking about. Here are some of the benefits to bundling your insurance policies:
Save Money… and Time
Consumers like saving money and insurance companies like retaining their clients. By offering special bundling discounts, insurers provide an incentive to their policyholders. The more products you bundle, the more discounts you get.
According to Nasdaq, some insurance providers offer discounts of up to 25% when bundling several policies. Policyholders also benefit from reduced deductions when they bundle in addition to having a lower premium.
What does this mean? A deductible is the amount you pay out of pocket when you file a claim. If your auto repair costs are $5,000 and you pay a $1,000 deductible, the insurance company pays the remaining $4,000. Many providers keep a single deductible requirement when you bundle more than one policy.
Another aspect to consider is convenience. Having all your policies in one place not only reduces the amount of paperwork and policy management, it also simplifies the overall process. Everything stays in one place and renewing your policy becomes easier.
Insurance companies also like it when policyholders choose to bundle their services because it allows them to get to know their clients better. Familiarity brings peace of mind to both parties and reduces the amount and frequency of phone calls that are needed to follow through with claims and other insurance-related questions.
This satisfaction brings loyalty. A study conducted by J.D. Power determined that 46% of bundle-clients renew their premium vs. only 28% of those who don’t bundle.
The Downside of Bundling
Bundling sometimes means having lesser coverage. While this is not the case for every carrier, some providers may offer savings in detriment of excellent policies. Always confirm with your agents that there are no major changes to your coverage when you bundle.
Convenience may also lead to complaisance. Having all policies in one place brings a sense of loyalty but also prevents consumers from looking for better rates and options in the market.
What Insurance can you Bundle?
The most common bundling practice includes auto and homeowner’s coverage, but this is not the only option. National insurers offer other bundles such as:
- Multiple vehicle auto insurance
- Auto and renter’s insurance
- Auto, renter’s, and life insurance
- Auto, homeowner’s, and life insurance
- Auto and business insurance
The are many options in the market. Before you settle for one option, speak to your agent and discuss the benefits of bundling insurance policies. Don’t look at the savings alone, but take the coverage options into consideration. Will your car or home have the same protection when bundling these two policies? Take time deciding what the most sensible option is for you.
How can you bundle your insurance policies?
You don’t need to be a provider’s client to bundle services. If your auto insurance is with one company and homeowner’s insurance is with another, speak to both agents first to compare rates and coverage.
Do your research and don’t hesitate to contact other carriers to ask their bundled rates. Compare multiple plans to choose which best fits your needs and budget.
Infinity Insurance offers multiple bundling options. Whether you’re looking to bundle your auto insurance with homeowner’s, renter’s, or life insurance, we can help you with your needs. Call one of our friendly agents at 1-800-INFINITY or visit our website to receive a quote within minutes.