We all like to save money, especially on insurance.

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Aside from health insurance, many of us need two other types of insurance: home and auto. Most insurance companies that provide both will offer a discount if you bundle, but does that really save you money in the long run?

We recently researched the top car insurance companies in the industry based on levels of coverage, customer satisfaction, and the claims process. To answer the question posed above, we selected seven of those companies that offer discounts ranging from 10 to 25 percent for bundling home and auto insurance. Let’s take a closer look at the pros and cons of bundling, and ultimately decide which provider offers the best deal.

 

In this article:

Why Providers Offer Home and Auto Insurance Bundles

If you’re considering a home and car insurance bundle, you may wonder why insurance companies offer this option to begin with. While bundling your insurance saves you money, it also saves insurance companies money.

In fact, insurance companies spend less money when selling multiple policies to current customers than when they target potential new clients. Also, many people who bundle their insurance policies stay with one insurance company for longer. This helps insurance companies maintain customers.

Mostly, though, insurance providers save money on underwriting when you bundle. Essentially, car and home insurance companies research each new client to determine how much risk the customer presents. This process, called underwriting, includes looking into a customer’s credit history, driving record, employment history, and other factors. Since insurance companies complete underwriting for each new customer, they save money when they only have to complete this process once for multiple policies.

Pros Of Bundling Home And Auto Insurance

As you just read, home and auto bundles benefit you and your insurance company. Here’s a closer look at the benefits for you.

Cost Effective

First and foremost, if you bundle your auto and home insurance, you will generally save money on insurance premiums. Although most car insurance companies offer a variety of discounts, the multi-policy discount often ends up being one of the best available.

Exact discounts vary between insurance companies, but most would offer a discount of at least 10 percent. You may save even more if you have a combined deductible. Some companies lower deductibles when you bundle, and others allow customers to combine deductibles in certain claims circumstances. For example, if a tree in your yard falls on your car, you may be able to lump all damages into one claim.

Saves You Time

Figuring out one insurance company’s claims process and customer service can be difficult enough. So, dealing with one company for all your insurance needs rather than two or more can save you time and energy. Also, if you choose an insurance company who works through local agents, you only need to deal with one agent for everything when you bundle your home and auto insurance. This may help you feel closer to your insurance agent and save you time when renewing policies or making changes.

Finally, we use smartphone apps for everything now. When you bundle policies, you will only need to download and learn one app. Plus this allows you to quickly check both policies and pay premiums from the same place.

Lowers Your Drop Risk

Insurance companies closely monitor your driving record and insurance claims to continuously reevaluate your financial risk. If you file too many claims or end up in multiple accidents, some insurance companies will drop you. However, when you bundle your car and home insurance, you become more valuable to an insurance company. This helps counteract your potential risk and can make insurance companies less likely to drop you. Although you shouldn’t entirely rely on this, it could prove beneficial depending on your circumstances.

Cons Of Bundling Home And Auto Insurance

Although the bundling discount always looks appealing, there can be some drawbacks to combining your insurance policies.

Not Always Cheaper

Most insurance companies offer customers discounts when they bundle car and home insurance, but you may not end up receiving the cheapest overall rates this way. Since some insurance companies primarily focus on car insurance, they may not offer competitive rates on homeowners insurance. Personal factors like driving record or home location may lead to higher rates, too. We recommend that you always collect multiple home and auto insurance quotes before settling on one provider.

Premium Creeps Over Time

When customers bundle car and home insurance, they typically remain loyal for longer durations of time. Many customers who bundle renew without even price comparing first. Insurance companies know this, and may sometimes increase premiums over time because they feel confident that they can keep your business.

If you decide to bundle your home and auto insurance, collect quotes any time your rate increases due to “pricing optimization.”

Third-Party Vendors

Many customers assume that, when purchasing home and auto insurance from a provider, both policies will be handled by the provider. However, some insurance companies work with affiliate companies to offer multi-policy plans. Although you still receive a bundling discount, you may not receive the convenience of having all insurance offerings under one roof.

Make sure to research who would be handling your policies if you choose to bundle with a certain provider.

Other Considerations For Bundling Insurance

Many factors impact insurance rates, and the cheapest insurance isn’t always the best insurance. Therefore, it’s important to consider the following when obtaining home and auto insurance quotes:

  • Home and Car Values: The value of these items can impact rates, discounts, and coverage needs.
  • Location: Your physical location can affect both your car and home insurance rates. Some insurance companies will charge more in certain geographic regions.
  • Coverage Needs: Sometimes bundling discounts only apply to certain policies, and you can end up paying more for your policies while receiving less coverage. Always compare quotes and consider deductible amounts, coverage limits, and other important factors.
  • Cancellation or Transfer Fees: Some companies may charge fees for early termination or policy transfers, so read the fine print before making a switch to bundle your home and car insurance.

Top Home And Auto Insurance Companies

Many of the biggest names in car insurance also offer homeowners insurance, but not all companies have the same multi-policy discount rates. Based on numbers from U.S. News and World Report, here’s a quick comparison between top insurance companies:

Insurance Company Average Annual Car Insurance Home and Auto Bundling Discount
USAA $842.63 10%
Geico $984.70 Varies
State Farm $1,166.65 17%
Progressive $1,222.50 10%
Farmers $1,456.07 Varies
Nationwide $1,494.22 Varies
Allstate $1,678.31 10% auto and 25% home
 

In some cases, insurance companies with higher discounts may actually have higher premiums to begin with. However, several of the above listed companies have very competitive rates and great discounts. With homeowners insurance costing an average of $1,228 per year, choosing a provider can be an important decision.

If you’re eligible for USAA, the company’s low rates and 10 percent discount make it a great choice for bundling home and auto insurance. Otherwise, here are our top recommendations for customers who want to bundle, based on the above findings and our own provider research:

State Farm

Since 1922, State Farm has grown into a national leader for auto and home insurance needs. The company’s reputation speaks for itself. State Farm has an A+ BBB rating and an A+ financial strength rating from AM Best. A combination of online tools and local agents make the customer experience great all around.

For auto insurance coverage, State Farm offers the following:

  • Bodily injury and property damage liability
  • Collision and comprehensive
  • Personal injury protection and medical payments
  • Uninsured and underinsured motorist
  • Rideshare insurance (in some states)

State Farm has the following choices for homeowners coverage:

  • Dwelling coverage
  • Dwelling extension
  • Personal property coverage
  • Loss-of-use coverage
  • Personal liability insurance
  • Medical bill coverage

State Farm’s website claims that customers can save up to 17 percent with homeowners, renters, condo, or life insurance in addition to vehicle insurance – which is relatively high compared to competitors.

Most Popular Car Insurer in the U.S.

★★★★★

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Our 4th pick: Most popular auto insurance company that services over 83 million policies.

 

Geico

One of the largest car insurance providers in the nation, Geico also offers great homeowners insurance. The provider is highly rated by industry experts, with an A+ rating from the Better Business Bureau (BBB) and an A++ rating in financial strength from AM Best. In regard to car insurance, J.D. Power consistently ranks Geico well for customer satisfaction.

Geico offers the following coverage for vehicles:

  • Bodily injury and property damage liability
  • Collision and comprehensive
  • Personal injury protection and medical payments
  • Uninsured and underinsured motorist
  • Guaranteed Asset Protection (GAP) insurance
  • Mechanical breakdown insurance
  • Rideshare insurance
  • Emergency roadside assistance
  • Rental car reimbursement

For homeowners, Geico has the following coverage:

  • Property damage and property protection coverage
  • Personal liability insurance
  • Jewelry protection
  • Medical bill coverage
  • Expense provisions

In addition to discounts for bundling home and auto insurance, Geico has multi-vehicle bundles, bundles for car and renters insurance, and more. The home and auto bundle discount is based on customer loyalty, so you’ll likely get the best deal if you’re already a Geico customer when you choose to bundle.

Best Company Overall

★★★★★

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Our 2nd favorite and best for those ineligible for USAA: Offers competitive pricing and great coverage.

 

Progressive

Progressive is one of the most well known insurance companies around thanks to Flo and her Name Your Price®  tool. Drivers can get side-by-side quote comparisons to determine which coverage best suits their needs. Along with a great customer experience, Progressive has an A+ financial strength rating from AM Best.

Progressive offers the following car insurance coverage:

  • Bodily injury and property damage liability
  • Collision and comprehensive
  • Personal injury protection and medical payments
  • Uninsured and underinsured motorist
  • Loan/lease payoff
  • Custom parts and equipment value
  • Rideshare insurance
  • Emergency roadside assistance
  • Rental car reimbursement
  • Deductible savings bank

With Progressive homeowners insurance, you have the following options:

  • Dwelling coverage
  • Coverage for other structures
  • Personal possessions coverage
  • Loss-of-use coverage
  • Personal liability insurance
  • Medical payments
  • Water back-up coverage
  • Personal injury coverage

With Progressive, it’s important to note that a homeowners policy will be underwritten by one of Progressive’s partners. With that being said, Progressive offers a multi-policy discount and single deductibles in the event of hazards that impact both your car and home. On top of the provider’s already reasonable rates and extensive types of coverage, we think that makes them a great choice for bundling.

Great for Discount Bundles

★★★★★

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Our 3rd best overall pick: Offers a number of ways to get a discount, including the Snapshot tool or bundle options.

 

How Do I Obtain Home And Auto Insurance?

Bundling your car and home insurance is actually a relatively simple process. Once you compare quotes from multiple insurance companies, you will contact the company to start the application process. The agent will typically ask you if you’d like to bundle home and auto insurance. If they don’t, mention this early in the process.

If you’re switching insurance companies, be sure to research your state’s car insurance laws and ask your new insurance company when you should cancel old policies. As we mentioned, you should find out if you will end up paying any cancellation or transfer fees if you are ending your previous insurance policy early.

Final Thoughts On Bundling

Given the discounts, time saved, and lower drop risk, combining home and auto insurance makes sense for many people. However, there are some cases when it isn’t in a customer’s best interest or doesn’t offer the most savings. Always shop around and research companies carefully before making a decision about your home and car insurance.

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