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Does it ever pay to not bundle home and auto insurance?

March 16, 2023
3 mins
Couple sitting in the back of their car parked in their driveway in front of their home with a tablet smiling

This article has been updated from a previous version.

If you own a home and a vehicle, you may already be familiar with insurance bundling. Or maybe you’ve been purchasing car insurance for a few years but are now in the market for home insurance as well. While it can be easier and cheaper to use the same insurance company for both policies, it may not be the best option for every policyholder.

“Bundle and save” is a common tagline in the consumer world, from the promise of saving money on your cable and phone package, to buying everyday items like packaged shampoo and conditioner sets. But it’s not always the smartest or most cost-effective way to go when it comes to choosing insurance providers. There are pros and cons to bundling — and a lot depends on your personal situation.

When bundling home and auto policies makes sense

Bundling can offer a great deal on your premium in many cases. In fact, getting two or more policies from the same insurance provider can sometimes mean discounts of as much as 15%. Plus, bundling usually offers the convenience of only having to be billed by one insurance company. Some providers may even require only a single deductible under a bundled policy if both your car and your home are damaged in the same incident, such as a fire.

Bundling your home and auto insurance policies typically makes the most sense if you’re currently paying a much higher home insurance premium than on your car insurance (houses are more expensive than cars, so this is the most common scenario.) In any case, it pays to shop around to make sure you are getting the best deal for the coverage you require.

When to think twice about bundling home and auto policies

Bundling may not be the best option if your car insurance rate is currently very expensive. This could be due to any number of factors, including a long history of filing claims, a poor driving record, including collisions, speeding tickets, or even a high-risk vehicle model. These factors often result in a higher auto insurance premium because you are perceived as a higher risk client by insurance companies.

In this situation, you could save more overall if you shop around for the cheapest auto insurance provider, rather than go with a company that offers a discount on a bundled auto and home insurance policy.

You might also find that some bundled policies aren’t actually provided through the same company, as some providers use affiliates. If that is the case, you will lose the convenience of having only one company to work with.

Final thoughts on switching to a bundled policy

When deciding if you should bundle home and auto insurance, make sure to compare quotes for bundled policies and separate policies. You may find separate policies are cheaper than the bundled rate available to you. Or you might find that it’s substantially cheaper to bundle.

Once you know exactly what the savings will be, you will be well equipped to find the best coverage and price for your needs.

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Gail Balfour

Gail Balfour is a writer, editor, and senior content designer with more than 20 years’ experience covering areas of business, finance, technology and healthcare. A former editor of ComputerWorld Canada, she has also contributed to many other publications and corporate websites including Backbone, PwC Canada, RBC Canada, Women's College Hospital, Canadian Healthcare Technology and The Canadian Breast Cancer Foundation.

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