Ways to Save – Insurance Bundling

Everyone wants to get the best deal possible on their insurance rates. This principle holds true in virtually every area of commerce from buying a new car to stocking the pantry with a variety of breakfast cereals. Unfortunately, many of the strategies that are useful when it comes to cars and food are just not applicable to the realm of insurance products.

Customers buying goods can often wait until a sale comes along, but since insurance policies are priced according to risk and are not subject to being overstocked the way physical goods are, there is really not any such thing as a “sale price” on insurance. Neither do newspapers and magazines print coupons that consumers can use to get a certain percentage off a policy, let alone a “buy one, get one free” policy.

Saving Money on Insurance: Comparison Shopping

There are only two strategies that are highly useful for saving money on insurance products, and of these, only one translates well to the world of consumer goods with which we are all so very familiar. This first strategy is comparison shopping, always a good idea. Even though insurance products such as car insurance and homeowner’s insurance are priced according to risk, every insurance company has their own particular ways of assessing that risk. This leads to a variety of places in the marketplace, which means that consumers can compare rates and choose the ones they feel give them the most “bang for their buck.”

Saving Money on Insurance: Bundling

The second strategy for saving money on insurance policies is one that really has no ready parallel in the world of physical goods: bundling. Only in rare cases can a supermarket shopper, for example, get a lower price on milk and bread by purchasing both products at the same time. This practice, known as bundling, is actually quite common among insurance companies, to the point where one could even consider it a standard practice.

Although any two insurance policies could in theory be bundled together, the most common arrangement is for insurance companies to give customers a discount if they will maintain both a homeowner’s insurance policy and a car insurance policy with the same carrier. In effect, in return for giving the same insurance company twice as much business, the company will reward the customer with a discount. This discount can add up to as much as 10% in some cases – and sometimes may be even higher, making it well worth the effort of switching carriers for one or both policies in order to secure a bundled rate.

In rare and special cases, there may be other discounts available to insurance customers. One well-known one is the “good student discount,” called by various names depending on the state involved. These discounts can help make car insurance in particular more affordable when young drivers such as teens are involved, but they are usually worth far fewer dollars than can be saved by bundling.

Of course, if you can bundle your policies and get a good student discount for your teen as well, then that may be the best of both worlds.