Bundling Home and Car Insurance Discounts May COST You Money

I just came across this car insurance piece from The Motley Fool:

Bundling Your Insurance May Be Costing You Money.

“The price of auto insurance has been rising. It’s gotten to the point where bundling may be costing you money. Homeowners who bundle home and car insurance prices are increasingly dissatisfied, according to the J.D. Power 2022 U.S. Home Insurance Study.

Savvy shoppers notice when the price of auto insurance costs more than bundle discounts. They look for alternatives — even if that means splitting up their insurers.”

The author, Cole Tretheway, is expanding on this: 

“The future of the home and auto insurance bundle, once a mainstay of property and casualty (P&C) insurance customer retention and lifetime value strategies, has come into question as legions of customers have started to break-up their polices.”

“Captive” Vs. Independent Insurance Agents

Here’s the backstory: Many insurance agents at “big name” insurance companies are captive.”  They can only write business for a single insurance company. No matter what your situation is, they can only show you insurance products from that one carrier. And often, it’s a bad fit. Especially for high-risk drivers, owners of classic, collector, exotic, or high-performance sports cars or supercars, businesses, and everyone else who doesn’t fit the “plain vanilla,” 2.5 children-and-a-white-picket-fence risk model.

Most of these people are much better off with a carrier that is friendlier to non-standard risk drivers.

Historically, the main advantage to buying insurance from these captive carriers was convenience and bundling. That is, they would dangle a small discount in front of you if you buy multiple lines of insurance from them.

Usually, it’s homeowner’s insurance and car insurance.

But just because they offer a bundling discount doesn’t mean they’re the best solution for your particular case. In fact, they often aren’t. As the Motley Fool article notes, the bundling discount may come with strings, like forcing you to buy collision insurance on cars where you’re better off skipping it and investing or saving the money.

And too often, when they offer a multi-line “bundling” discount, they get you some other way. Like charging you more because you have a working class job or don’t have a college degree.  

Don’t get me wrong: I like that we have choices in this market. I like that every state has multiple competing insurance companies, each with very different approaches to underwriting, all slicing and dicing the data in different ways, looking for an edge. That means there are more choices in the market.

But you can only benefit from the competition if you allow insurance companies to actually compete!

That is, contact an independent car insurance broker. Not a captive one. An independent broker who can quote you rates and terms from many different competing companies, all with a single phone call or email.

Update your quote every year or two, or when your policy renews, or when you have a significant change in status.

Working with an independent car insurance professional is a very different experience than working with a captive one. Captive agents represent an insurance corporation.

An independent agent represents you. They work for you, not the carrier.

92% Of People Who Shop Around and Switched Save Money on Car Insurance.

Insurance companies can only get away with unfair undisclosed pricing policies if you don’t shop around! As long as you work with an agent that helps you compare terms quotes from five, six, ten, or more car insurance companies a pop, you can be sure that you’re getting a competitive deal.

Sometimes it makes sense to stay with your bundled car insurance policy.

But statistics show that most people who shop around for car insurance actually save money. 92% of people who shopped around and switched saved money by switching. 26% of those saved $200 per year or more on their car insurance.

This will be especially true for people in high-risk and non-standard risk categories – and potential savings could be higher. That’s because pricing for these categories varies much more widely from insurance company to the insurance company.

In every case, the best move is to have an independent broker run quotes from you from many different carriers and compare them to your current carrier.

Many times, you’ll find opportunities for improved coverage and price savings, even accounting for a bundling discount through a captive insurance agent.

To get started, click here, and fill out a brief online form.

We’ll take your information, and shop your application around to all the best carriers doing business in independent sales channels in your state.

That’s where the competition, so let’s make competition work for you.

Then you can compare your fresh quotes and coverage against your current carrier.

And do what’s best for you and your family.

See you on the road!

Steve “Mr. Insurance” Ludwig
CEO, Select Insurance Group 

For Further Reading


What is Umbrella Insurance?

Car Insurance: Is Comprehensive Coverage Worth It? 

Take a Safe Driver’s Course: Save Money on Car Insurance