Last month insuranceQuotes.com commissioned a Quadrant Information Services study that examined the average economic impact of bundling auto insurance with either homeowners, condo, or renters insurance. A multi-policy discount, or bundling, is one of the most popular discounts property and casualty insurers have to offer. According to insuranceQuotes.com, insurers offer bundling (typically home and auto) because it saves both them and insureds money in the long run.
"Insurance companies want to maximize profits, and the more business they write, the better," says Mark Carrasquillo, an insurance agent with the New York City-based E.G. Bowman Co. "Bundling discounts are a way to entice the consumer, which means more business for the insurer."
Using a hypothetical 45-year-old married woman with a bachelor's degree, excellent credit score, and no lapse in coverage, the insuranceQuotes.com study compared the average preminum discount for three types of bundling in all 50 states and Washington D.C.
The study found that bundling an auto policy with a homeowners policy produced the most significant discount. The national average premium discount for bundling the two is 15%.
The top five states with the greatest average premium discount for bundling auto and homeowners insurance are:
- Oklahoma – 22% discount
- Missouri – 22%
- Iowa – 21%
- Nebraska – 21%
- Oregon – 20%
To explain why Oklahoma is at the top of the list, Oklahoma Insurance Comissioner John Doak told insuranceQuotes.com that carriers that write policies in the state want to spread their risk among different kinds of policies because of the large numbers of catastrophic events in Oklahoma. Bundling discounts gives consumers an incentive to maintain multiple policies with the same insurance company.
On the other end of the list, the bottom five states with the lowest average premium discount for bundling auto and homeowners are:
- Florida – 5% discount
- Hawaii – 7%
- New York – 11%
- North Carolina – 11%
- Rhode Island – 12%
Florida, the state with the lowest average premium discount for bundling, has to contend with hurricanes, which makes it expensive for residents to insure their homes and cars and makes it difficult for insurers to cut rates, says insuranceQuotes.com.
Click "next" to see where all 50 states and Washington D.C. rank on insuranceQuotes.com's study.
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