Home and Car Insurance Bundle: What It Is + How It Works

Insurance is like the umbrella you keep in the car's trunk: You hope you don't need to use it, but it's a lifesaver when caught in a rainstorm. Both auto and home insurance can add to your financial burden, but combining or bundling the two can lead to saving on both with many insurance providers.

Learn what it means to bundle auto and home insurance, why you should consider it, and how much you can save.

What does it mean to bundle home and auto insurance?

A home and auto bundle is a combined insurance policy that provides coverage for both your car and your house under one premium. To bundle policies, you must open multiple policies with one insurance provider. The primary reason many people choose to bundle is to take advantage of multi-policy discounts.

Many insurance providers will let you bundle your policies to get a discount, including Allstate, Geico, Progressive, and more.

Home and auto are two of the most common types of insurance to bundle, but you can also combine policies for the following:

• Auto and renters insurance or condo insurance
• Auto and life insurance
• Home insurance and life insurance
• Auto, home, and life insurance
• Multiple vehicles

Each insurance provider can set its own rules about multi-policy discounts, but the savings can be considerable when you open more than one policy with one company. 

How much can you save by bundling insurance?

Getting a discount on your premiums is likely the biggest reason to bundle your policies.

Bundling discounts vary, but we always recommend keeping an eye out for them as they can be some of the easiest discounts to secure. Here are a few examples of multi-policy discounts from well-known providers: 

• Progressive: Save an average of 7% on your car insurance with a home and auto insurance bundle.
• Allstate: Save up to 25% when you bundle home and auto insurance.
• USAA: Save up to 10% when you bundle home or renters and auto insurance.

How much of a discount you qualify for depends on your coverage, location, your background information, and other factors.

Other reasons to bundle your home and auto insurance

Getting a home and car insurance bundle can help you save money on your premiums. But it's not the only benefit of bundling insurance policies together. Be sure to factor in these potential benefits when comparing insurance quotes from different providers.

• Simple management: It's likely less hassle to manage your payments and policies if they're all under the same roof. Instead of using multiple websites or mobile apps, you get to see all your information in the same place. This can save you loads of time, as well as potential headaches from making account changes or tracking payments to different providers. It's hard to put a price on convenience, but it makes a difference.
• Loyalty perks: Certain insurance providers offer rewards or benefits to their loyal customers. This means if you stay with one insurance company for a while, you could receive additional benefits for your time. This could include reimbursement for a lost car key or a discount on your insurance policy. If you bundle policies with the same company, it's easier to stick with it and earn more benefits over time.
• Streamlined claims process: Filing a claim can be stressful, but having both home and car insurance with the same provider can simplify the process. Many insurers offer a streamlined claims process for bundled policies, making it easier to resolve issues quickly and efficiently.

Tips on how to bundle and save

You already need insurance coverage on both your house and car, and there are many good reasons to try to bundle and save. However, keep these tips in mind so you don't fall into the illusion that you are saving money when you really aren't.

• Don't buy more insurance than you need. If bundling policies means getting more insurance coverage than you want or need, it may not be worth it. Insurance companies can make it look like you are getting a better deal by saying you are saving hundreds by bundling, but don't forget to price out your desired plans individually. Know how much car insurance you need before shopping around. This will help you get what you need without buying a policy that has too much coverage.
• Comparison shop. It's easy to bundle policies with the same provider. But that doesn't mean you're getting the best deal. Check all the policies in your area to see what's available before making a decision. This may involve using an insurance marketplace to get quick and reliable quotes or talking to an independent insurance agent who works with multiple providers. You might end up with a less expensive policy that beats the savings on a multi-policy discount.
• Look for other discounts. Typically, multi-policy discounts save you 10% to 15% off, but it is not always the best discount. Many years ago, it made more financial sense for me to get auto insurance through Costco instead of bundling it with another company because of my membership discount. Other popular insurance discounts include good student discounts, military discounts, and discounted perks if you shop through your place of employment.
• Read the terms. Be aware of affiliate insurers, or third-party companies, that your insurance provider may use to handle a part of your bundle. This is a common practice, but it can make it more difficult to manage your policies if you still have to deal with different companies. If the discount is more important than the convenience, it could still be worth it to deal with third-party providers.
• Check for fees: If you're not sure how to switch car insurance, it's not that complicated. But one thing to be aware of is that you might incur a cancellation fee if you cancel your existing policy early. If you are subject to a cancellation fee, make sure it's less than your potential savings on the new policy.

FAQs

Bottom line

If you think a home and car insurance bundle could save you money, you're likely correct. Multi-policy insurance discounts are one of the easiest ways to save money on car insurance and other insurance premiums. In addition, it puts your policies together under the same company, which makes it easier to manage your accounts and payments.

But don't go for the first multi-policy discount you see. I had to spend over two hours getting different bundling quotes and making sure I was comparing apples to apples. However, this time was well spent since I was able to save about $250 on my insurance cost at the time — that's like working for $125 an hour. Remember that a multi-policy discount isn't always the best option for saving money. It is also a good idea to think outside the auto and home bundling package — adding term life insurance on top of your vehicle insurance could result in the same big discount.

Do your due diligence and research the available deals in your area from every insurance provider. This will help you find both the best discounts and best coverage options, whether you end up bundling or not.

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