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Do You Want to Save Big on Insurance – Then Bundle!

Do You Want to Save Big on Insurance – Then Bundle!

In today’s time and age, most people don’t search for an auto insurance provider.  When someone turns 16 and begins to drive, they usually go to that auto insurance provider that their family has used for years.  After a few years some drivers may change providers to save a few dollars, but in almost all cases, people stay with the same provider for several years without researching a better option.

Many first-time home buyers also take this route, using the homeowner’s insurance that their family has used for decades.  Or, they may use a company that their real estate provider recommended to them during the purchase of their home.  Life Insurance policies often acquired with this same pattern.

Most people purchase insurance due to it being cheaper and the purchase is hassle free.  When buyers purchase insurance with this frame of mind, they find themselves with a handful of different insurance companies covering an array of different insurances for no good reason.  This will eventually put you in a position where you have to juggle multiple insurance companies, separate bills, and also pay higher premiums.  Below we will go over a few ways where you can cut your expenses and make your insurance coverage more streamlined!

Bundling Makes Sense

The larger insurance companies price their insurance rates to bring in a specific section off the insurance market.  They price their insurance rates in “bundles.”  Not only do they want their homeowner’s insurance business, but also their auto and life insurance (referred to as the big 3).  When they bundle these 3 areas of insurance, there is no way other insurance companies can match their price when biding one area of insurance, such as car insurance.

Insurance companies offer multi-line discounts to attract customers who will need more than one type of insurance. These companies offer a lower rate to insure your house, car and life than if you insured each area separately.  The same goes if you add a second car or other type of insurance, like RV or motorcycle insurance—the discounts will continue to multiply.

When joining auto, home and life insurance, it wouldn't be uncommon for many families to spend between $3,000 to $5,000 or more each year.  Of course, these rates differ on where you live, the value of your home and car(s), driving habits, personal health and so forth.

Where’s the Punch Line?

For just one line of insurance, most large companies aren't extremely price-competitive.  After all, those thousands of people on staff can really add up. By combining your policies under one roof, the companies benefit from economies of scale and can justify more discounts.

Companies also give discounts to retain customers because it is expensive for companies to continually process (also known as underwriting) a revolving door of new customers. Due to the added expense associated with customer turnover, insurance companies prefer to have customers who carry multiple lines of insurance and keep these policies in place for years.

The Final Facts

Combining all of your policies with one insurance company can save you money compared to having a variety of carriers. It's also important to remember when one company is handling all of your insurance policies, that's less time you must spend sorting through and paying each policy. And as they say: Time is money.

Please feel free to reach out to us if you have any other quesitons about bundling insurance - we would be glad to help!  CLICK HERE