To attract and retain customers, most insurance companies offer multi-policy discounts (bundling discounts). While this may sound like a good deal, bundling policies has some downsides, too. Therefore, you should analyze your situation carefully before bundling your policies.
What Is Bundling?
Bundling insurance means purchasing multiple insurance products from the same insurance company. For instance, you can buy your home, auto, and life insurance coverages from one insurer instead of purchasing them from three different companies.
Pros of Bundling Insurance
By bundling your insurance policies, you'd be able to:
- Save on insurance costs – Like earlier said, bundling policies can substantially reduce your insurance premiums. This is because many insurance companies give bundling discounts. Standard bundling discounts usually range from 5% to 25%, which means that you can save a lot by bundling your policies. However, not every insurance provider gives bundling discounts.
- Simplify your work – To get the right insurance, you will have to compare quotes, consult different agents, fill paperwork, and submit personal details. Once you get the right insurance, you will also have to pay monthly premiums, make calls to the insurance company, and review your coverage regularly. This can be overwhelming, and it can be worse if you're dealing with multiple insurance providers. For example, if you have policies from four different insurers, you will have to complete each of the mentioned tasks four times, and this can be exhausting. It is also possible to mix up details from different insurers, something that can cause confusion and mental exhaustion. Bundling policies will significantly ease your work because you'll be dealing with only one provider.
- Reduce chances of being dropped due to many claims – It is not exceptional for insurance companies to drop insurance policies due to too many or too large claims, which typically signify high risk. In case you have bundled policies, the insurance company will be less likely to drop you due to many claims, although there's no guarantee for this.
Cons of Bundling Insurance
Bundling generally denies you the benefits of shopping around, which include getting cheaper yet more comprehensive coverage. This is especially true if your bundling discount is small. Additionally, bundling discounts are, in most cases, only helpful at first, particularly if the insurer increases premiums with time. Lastly, some insurers offer their coverages through affiliate companies, and this means that your bundled policies may, in the real sense, be from different providers.
Things to Do Before Bundling Car and Home Insurance
- Determine your coverage needs to avoid bundling policies with companies that won't meet your insurance needs.
- Compare quotes – Before bundling, shop around to ensure that no other quote is cheaper and better than your intended bundle. In some cases, shopping around may land you a better offer.
- Review your policies – Even after bundling, you should not tie yourself to the same provider, especially if you're not getting the value of your money. You should review your policies regularly and keep looking for better quotes.
While bundling policies can save your costs and simplify your work, it can deny you better offers from other insurance providers and end up being expensive in the long run. Are you looking for the right insurance coverage? Our insurers at Jack Stone Insurance Agency will assist you through the process. Contact us today to get started!
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