I Asked an Insurance Agent About Saving Money by Bundling Insurance

I Asked an Insurance Agent About Saving Money by Bundling Insurance

My husband and I keep most of our finances separate. We’ve been married for three years and other than one joint credit card and savings account, our money isn’t commingled.

But lately, as we’ve both been auditing our finances, we’ve realized that we’re spending too much money on a variety of insurance policies that we each have. Between the both of us, we have renters, auto, pet insurance, and personal valuables insurance policies. We’re paying around $500 a month.

In an effort to save more money this year, while not cutting back on any of our insurance policies, I wondered if there was a way that we could bundle these policies to save money. I spoke to Alison Jones, an insurance agent with State Farm, to hear more about what my options are. Here are three steps she advised me to take so that I can save money every year.

Bundling policies helps you earn a discount

One of the biggest mistakes my husband and I made with our insurance policies was not considering the amount of money we’d save if we bundled them together.

“Bundling insurance is quite simple,” Jones shared. “It’s when a person groups more than one policy together. Not only does this give them added protection but it also saves them money.”

My husband took out the auto insurance policy and pet insurance policy on his own. I took out the renters’ insurance and personal items insurance on my own. Because of how we took these policies out, we didn’t benefit from discounts available through the art of bundling.

Jones shared that as an example, if a person has auto insurance at one insurance company, they could get a 5% discount if they add renters insurance to that policy.

“The discounts often reach up to 25%,” she shared.

Moving all of our insurance policies under one roof

When I listed off the different insurance policies I have, Jones asked me if they are all under the same insurance company. I told her that they are not. We use a different company for each of our policies (auto, renters, pet, and jewelry). She shared that when you move these policies under one roof, at one insurance company, you are going to save money automatically.

“You will automatically save money because you will receive the multi-line discount (also known as a bundle discount) for having more than one policy with the company.”

To test this out, I called up two different insurance companies and asked each one to quote me on how much it would cost if I moved all of my individual insurance policies to their company. The companies were each able to give me a bundle discount that would save me around 10% to 20% a year, which would save me $500-$1,000 a year.

Jones also explained that unlike other businesses, like cable or phone services, insurance agents don’t have the ability to negotiate policy rates with you or provide extra discounts and offerings.

“Insurance companies work differently than other industries in how prices are set,” Jones said. “Rates are determined based on hundreds of different factors, like loss frequency, driving history, credit characteristics, and longevity with prior carriers, and an algorithm is used to calculate rates.”

Jones said that the longer you stay at one insurance company, the more longevity discounts you may earn, depending on the company. Insurance carriers look at time with prior carriers as a positive, and that is part of the algorithm. She said if you do decide to shop around for plans elsewhere, make sure you go with a reputable company.

“To check if a company is reputable, you can look them up on one of the rating agencies like Moody’s, A.M. Best, Fitch, and Standard & Poor,” she said.”If the deal seems too good to be true, make sure you don’t have a new customer discount that will fall off after the first renewal.”

Life insurance can be bundled with the rest of my current needs

When I told Jones that another thing on my list to do this year was get life insurance, she mentioned that a policy like that could be added to my bundle and help me save more across all of my policies.

“This goes back to the multi-line discount. Getting a life insurance policy will give you a multi-line discount on your auto insurance, and you will be better protected.”

This made me realize the importance of finding an insurance company that offers multiple lines of insurance for different life touchpoints, from property to pets, auto, and even life insurance. That way, I can price out a bundle for all my insurance needs under one roof and save hundreds of dollars a year doing it this way.