Are you missing out on lower car insurance costs?
According to J.D. Power, more than one in five Americans aren’t opting for one of the most common ways to help get premiums down.
And what is this tactic? Bundling multiple policies together.
By getting more than one type of policy from the same insurer has the potential to lower your premium down – which is one of the reasons 77 percent of insurance customers bundle policies.
But is it for everyone?
Here’s a guide to bundling your insurance to help you figure out if it’s for you.
What’s bundling insurance?
Bundling your insurance policies means that you’ll have multiple policies under one insurance company. Insurance companies offer savings with the multi-policy discount.
For most of the big carriers, a multiple-policy discount applies to various combinations of:
- Auto insurance
- Homeowners insurance
- Renters insurance
- Life insurance
Some insurance companies also include motorcycle insurance and boat insurance for a discount, too.
How much is the discount?
It not only varies by insurance company, but it also varies by state.
You can get a discount from anywhere between 5 to 25 percent on each policy. But typically, you’ll see a bigger discount on your homeowners insurance since those policies cost more than a car insurance policy.
Not only is there a difference in the amount of discount you’ll receive, but there’s a difference in how it’s applied too.
For some carriers, if you have a home and auto insurance bundle, you’ll only see a discount on your auto premium.
For other insurers, you might see a 10 percent discount on your auto policy and a 15 percent discount on your homeowners insurance.
What else is in it for me?
Besides the fact that you’ll get a discount on your premiums, it’s also a way to simplify insurance for you.
If you’re protecting all your property with one company, this makes managing your policies easier. Your bills are all going to the same place, you never have to wonder which company to call if you have to file a claim, and it cuts down on time to make changes to your policies.
And you might be happier with your insurance company if you bundle. In the same J.D. Power study, customers who bundle insurance tend to be more satisfied compared to those who don’t.
How do I bundle?
Bundling your insurance is usually an option presented at the beginning of the insurance process. An agent will most likely ask you if you have any other property to insure.
But if you already have an auto or homeowners policy with a different company and want to switch to one company for a bundle, make sure you’ve read up on how to switch car insurance companies.
You want to avoid paying cancellation fees and you don’t want to have lapses in coverage. Any lapse in coverage will result in a rate raise.
Should I bundle?
If you’re getting a good deal by bundling, you should do it. But the danger here is that bundling often leads to a “set it and forget it” mentality.
Just because you’ve saved money now doesn’t mean that you’ll continue getting the best deal this way. As long as you’re keeping up with your rates and monitoring any change, bundling your insurance is a great option.
But it is becoming an increasingly less popular among the younger generations. In the same study, only 65 percent of Gen Y bundle their insurance. This is compared to a bundling rate of 78 percent among all generations.
If bundling insurance isn’t a better deal for you, keep your policies under separate companies.
Is bundling the only way to save money on my car insurance?
If you’ve done your research and realized that bundling isn’t a good deal, don’t worry. There are plenty of other options to check out that will get your premiums down.
There are things you can do today as well as in the long term that will save you money on your car insurance.
Have you raised your deductible?
Raising your deductible is an even easier option than bundling. It’s an immediate solution that could definitely pay off.
The higher your deductible, the lower your premium. But, wait! Don’t just spring for the highest deductible possible.
The key to finding the right number for your deductible is knowing what you can comfortably pay if you have to file a claim.
Once you settle on that number, set aside funds in an emergency fund dedicated to paying that deductible in the event that you get into an accident.
Have you reevaluated your coverage?
Your insurance needs can change over time. It’s great to be protected in the event of an accident, but you also don’t want to be paying too much for car insurance.
As your car gets older, it might not make as much financial sense for you to keep paying full coverage for it. If your car is reaching the big 1-0 mark, it might be time to switch to a liability-only policy. Doing this will lower your premiums.
Are you an alert driver every time you get behind the wheel?
How are your driving habits? The more aware you are of them, the quicker you can work towards fixing them.
Every time you get into an accident, it’s recorded on your driving record. And this will cause your rates to go up.
So every time you get behind the wheel, stay alert and cautious. Cut out any reckless driving and you will be on your way to a clean driving record.
Staying accident-free will eventually lower your insurance premium. This isn’t an overnight solution, but it will be beneficial to your safety and your rates if you keep at it.
If you’re looking to learn good driving habits, you can also take a defensive driving class. Some insurance companies offer a discount on the course and other insurers provide a discount on your premium after you’ve taken the class.
Are you keeping track of how many claims you file?
Remember: filing claims also greatly affects your rates. The more claims you file (small or big!) will cause your premiums to rise.
If you’re alert behind the wheel, you lower the possibility of you getting into an accident. And then you won’t have to file a claim.
And if something happens to your car, take time to figure out whether or not it’s worth it to file a claim. If the repairs cost less or slightly more than your deductible, you should consider paying out of pocket instead.
When was the last time you shopped around?
This one is key! If you get a great deal by bundling your insurance, it’s easy to have your bundle blinders on. But just because you get a discount once doesn’t mean you’ve automatically got the best price for the rest of time.
Monitoring your rates and getting quotes from different insurance companies pays off. And you can do this whenever you want. You can do it every year or every other year. Staying on top of this will ensure that you’re getting the best deal that you can without sacrificing coverage.
In a study done by NerdWallet, they found that on average drivers are missing out on $416.52 of savings by not comparing quotes. That’s a big amount of savings right there.
Since insurers rate drivers differently, there’s always a chance that you’ll get a lower rate from somewhere else. And even if it’s a few dollars off your premium, you’re still saving.