Bundling insurance can cost money

Notice the underlying bundling logic. It can be costly.

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Key Point

• Shoppers are increasingly unsatisfied with the cost of insurance.
• In particular, recent increases in auto insurance prices are encouraging shoppers to unbundle their insurance.
• You may be able to save money by calling your insurance company and asking for a discount, or by purchasing both individual and lump sum rates.

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Many people bundle their insurance for discounts. That’s kind of the point. Auto insurance and homeowners insurance go together like peanut butter and jelly. However, some bundlers are rethinking the move. Here’s why:

expensive car insurance

Auto insurance prices are rising. We’re getting to the point where bundling can cost money. According to JD Power’s 2022 U.S. Home Insurance Survey, homeowners are increasingly dissatisfied with bundling home and auto insurance prices.

Savvy shoppers find car insurance prices higher than set discounts. They look for alternatives, even if that means splitting up the insurance company.

Limited customization

Bundling insurance can force you to pay for things you don’t need. Some bundles require you to pay the bundler for the whole pizza, even if the bundler only wants one slice of his. For example, an insurance company may force a customer to pay collision coverage for an old car.

What other options do I have?

Insurance companies are competing for your attention. The best cheap auto insurance companies offer cost-conscious drivers the best deals in the industry.And the cheapest homeowners insurance companies offer similar discounts for homeowners.

Many tech-savvy customers turn to Insurtech companies such as Hippo and Lemonade. In fact, a J.D. Power study found that one in three homeowners who don’t have lemonade insurance but know the brand would buy insurance if lemonade was available in their area. It says it will.

Shoppers have a choice when it comes to finding the best insurance. You shouldn’t feel tied down to your current insurer just because you have a bundle discount. It may be cheaper to shop with cheaper insurance premiums.

Need to unbundle?

it depends. My brother and I get multi-contract discounts through Geico. But if Geico raises the premiums on our auto insurance, even if that means unbundling and losing multi-policy fees, we’ll hunt around for a lower price.

Affordable insurance is essential, but good car insurance pays for itself. It turns out that it is more cost-effective to focus on the value you get from auto insurance than on price alone. The best car insurance companies are not always the cheapest.

When it comes to auto insurance, contacting your insurance company directly and asking for a discount may be the best and easiest way to save money. Insurance companies offer discounts on everything from a decent grade point average to having a working alarm system in your vehicle.

Have the following information ready when you apply for new home or car insurance:

• the cost of your car insurance
• home insurance
• Total cost of the insurance bundle

According to Forbes data, the average savings from bundling home and car insurance is 14%. If you can find a better discount without bundling, shop around. It could save you hundreds of dollars a year on premium costs.