Many clients have turned to bundling their home and car insurance to save money. The savings from the multi-policy discount can be substantial for many customers, but they also may differ from state to state.

The May 2014 Quadrant Information Services study, commissioned by insuranceQuotes.com, examined the average economic impact of bundling auto insurance with homeowners', condo, or renters' insurance to reveal which states saved the most—and least—through a multi-policy discount.

For the comparison, the study used a hypothetical 45-year-old married woman with a bachelor's degree, a good credit score and no lapse in coverage, and compared the average premium discount for three types of bundling in all 50 states and Washington D.C.

The study revealed that discounts can vary significantly from state-to-state, and while bundling may be appealing for many customers, it may not be for everyone.

“I think consumers, in general, leave a lot of potential insurance discounts on the table, and bundling is one of the biggest,” says Mike Barry, spokesman for the nonprofit Insurance Information Institute. “No matter where you live, a multi-policy discount is worth looking into.”

But bundling does not just save clients money. According to Mark Carrasquillo, an insurance agent with E.G. Bowman Co., many insurance companies offer bundling because it saves them money in the long run.

“Insurance companies want to maximize profits, and the more business they write, the better,” Carrasquillo says. “Bundling discounts are a way to entice the consumer, which means more business for the insurer.”

Actuarial data also shows that annual auto claims exceed claims for homeowners', condo or renters' insurance, meaning that insurance companies can maximize profits if they write as many property insurance policies as they do auto policies.

“It's possible to for a consumer to own a home for 30 years and never file a claim. But that same individual could conceivably have more than one incident with a car in just one month alone,” Carrasquillo says.

For the customer, the average premium discount for bundling their homeowners' with their auto policy is 15%, the survey reveals, which is more substantial than bundling auto policies with condo or renters' insurance. Troy Thompson, owner of Pinnacle Insurance Agency asserts that there are several reasons that this discount is more substantial, particularly because homeowners' insurance is more expensive, so discounts can be higher without impacting the insurer's bottom line.

“There's another correlation to make here, and that is if you own a home you're probably more financially stable, which means that you're statistically less likely to file a claim,” Thompson says. “The insurer wants your business and it allows the company to offer a more significant discount.”

Click through the following slides to see which states have the greatest and smallest average premium discount for bundling auto insurance with their homeowners', condo and renters' insurance policies.

Homeowners' and Auto Insurance:

Average Premium Savings: 15%

Greatest Average Premium Discount:

Oklahoma – 22% discount
Missouri – 22% discount
Iowa – 21% discount
Nebraska – 21% discount
Oregon – 20% discount

Lowest Average Premium Discount:

Florida – 5% discount
Hawaii – 7% discount
New York – 11% discount
North Carolina – 11% discount
Rhode Island – 12% discount

Condo and Auto Insurance

According to Eli Lehrer, president of The R Street Institute, a nonprofit research group, state-by-state variation for condo insurance comes down to differences between regulatory environments across the country.

“Most of the states near the bottom have very strict regulation for either auto or homeowners insurance, which gives carriers less flexibility and thus little ability to offer savings,” Lehrer says.

Average Premium Savings: 11%

Greatest Average Premium Discount:

Illinois – 17% discount
Missouri – 16% discount
Wisconsin – 16% discount
Iowa – 16% discount
Oregon – 15% discount

Lowest Average Premium Discount:

Florida – 7% discount
Rhode Island – 7% discount
Virginia – 8% discount
New York – 8% discount
Connecticut – 8% discount

Renters' and Auto Insurance

Renters' insurance is less expensive than homeowners' and condo insurance, resulting in the least amount of savings. However, differences in savings also can be linked to demographic differences between homeowners and renters.

“Statistics that show that a traditional homeowner has fewer claims than either a condo owner or a renter,” says Keith Balsiger, owner of Balsiger Insurance Agency. “A homeowner has a vested interest in the property and is more likely to maintain it.”

Average Premium Savings: 8%

Greatest Average Premium Discount:

Minnesota – 13% discount
Indiana – 12% discount
Missouri – 11% discount
Wisconsin – 11% discount
Iowa – 11% discount

Lowest Average Premium Discount

New Jersey – 5% discount
Connecticut – 6% discount
Florida – 6% discount
Rhode Island – 6% discount
Virginia – 6% discount

Special Reports /

5 states with the highest (and lowest) average premium bundling discounts

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