Bundling your insurance policies is likely the easiest and most popular way to save money on your insurance premiums.
A new study from insuranceQuotes examines just how much you can save, and looks at how rates vary depending on your state and what you are bundling, whether it be auto, homeowners, condo or renters insurance.
The study says the most significant savings come from bundling auto and homeowners insurance policies with the same provider. Customers nationwide can save an average of $322 (16.1%) per year.
insuranceQuotes commissioned a Quadrant Information Services study to examine the average economic impact of bundling auto insurance with either homeowners, condo or renters insurance. The study was conducted for the fourth year in a row, using a hypothetical 45-year-old married woman with a bachelor's degree, an excellent credit score and no lapses in coverage. The study compared the average premium discount for three types of bundling in all 50 states and Washington, D.C.
Researchers found the average annual premium discounts varied as much as 16.5% from the states with the highest savings to the lowest.
Why does bundling save you money?
Bundling or multi-policy discounts are offered as a way for insurance companies to compete in a highly competitive market and retain customers. This is one major reason why bundling insurance saves customers money. The second reason is that bundling saves insurance companies money, too.
“This all comes down to competition,” says Tennessee-based insurance broker John Hatcher. “There are so many companies out there that can offer lower rates that it’s become harder to keep customers long-term. But the more policies you have with one insurer the longer you are likely going to stay with that company.”
Arizona-based insurance broker Charlotte Burr says customers who bundle multiple policies tend to file fewer claims, which in turns saves the insurance company money.
“Insurance companies, as a whole, find that customers who have more than one line of business with an insurance company tend to be more stable and tend to stick around longer, allowing the insurance company to collect more in premiums — because it’s always cheaper to retain business than find new business,” says Burr, owner of the AZ Insurance Team.
Bundling discounts for home and auto
Bundling auto and homeowners insurance averages the largest discounts. The national average premium discount for bundling home and auto insurance is 16.1%, according to the study.
Here are the top five states with the greatest average premium discount for bundling auto and homeowners insurance.
- Mississippi — 23.2%
- Arkansas — 22.6%
- Missouri — 22.5%
- Illinois — 22.5%
- Minnesota — 22.4%
In contrast, the following five states, on average, showed the smallest percentage premium discount for bundling auto and homeowners insurance.
- Florida — 6.7%
- Hawaii — 10.6%
- NewYork — 11.5%
- Vermont — 11.6%
- Connecticut — 12.1%
These state-by-state differences reflect some of the standard influencing factors across all insurance matters.
For example, states like Florida that are prone to more tumultuous climates naturally have higher home and auto insurance rates, which in turn, prevents insurers from offering substantial multi-policy discounts.
(Image source: insuranceQuotes)
Bundling auto and condo
The national average premium discount for bundling your condo and car insurance is 11.6%, according to the insuranceQuotes study.
The following five states show the greatest average premium discount for bundling auto and condo insurance.
- SouthDakota — 16.5%
- Missouri — 15.8%
- Illinois — 14.9%
- Arkansas — 14.6%
- Kansas — 14.6%
Meanwhile, the following five states, on average, showed the smallest percentage premium discount for bundling auto and condo insurance.
- NorthCarolina — 6.7%
- Connecticut — 7.4%
- Florida — 7.7%
- NewYork — 7.9%
- NewJersey — 8.4%
Bundling auto and renters insurance
The average national premium discount for bundling auto and renters insurance is 7.9%, insuranceQuotes says.
Related: 5 reasons why renters need insurance
These five states show the greatest average premium discount for bundling auto and renters insurance.
- Minnesota — 13.6%
- Kansas — 12.6%
- Massachusetts — 11.4%
- Indiana — 11.4%
- Missouri — 11.0%
The five states with the smallest percentage premium discount for bundling auto and renters insurance on average are:
- NorthCarolina — 4.5%
- NewJersey — 4.9%
- NewYork — 5.0%
- Vermont — 5.9%
- Connecticut — 6.2%
Jayson Greene, an insurance expert with Carolina Insurance Professionals, says bundling your insurance is one of the easiest ways to save money, but it’s also a great way to simplify your overall insurance landscape.
“Save yourself the hassle of keeping up with multiple statements and renewal dates by combining your policies under a single insurance provider,” Greene says. “Bundling policies makes maintaining statements and policy renewals a breeze. It’s a good deal all around.”