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How Bundling Lowers Insurance Costs


It is not uncommon for people to have one insurance company that was recommended by their real estate agent for their home and a different insurance company for their car and still a different one for their life insurance. This is mainly because many people keep the same life insurance company that their parent had and follow the recommendation of their car dealer for their auto insurance. According to professional insurance and financial advisors such as, Calgary insurance agent you can greatly lower your overall insurance costs if you bundle them together with the same insurance company.

Sometimes people buy insurance at the cheapest possible price, which may mean they use several different companies. However, cheaper is not always better, especially for insurance. At the moment when you really need it, you could find that you do not have the coverage you thought you had. Bundling with one company may help you avoid unpleasant surprises.

How Bundling Helps

Insurance companies compete for customers just like every other product and when it is one policy compared to another, they may lower their price. However, most insurance companies want customers who will stay with them for the long-term, and to achieve this they bundle car and home and to give customers a cheaper rate than if they insured each separately. The discounts continue to add up if you add another car and a life insurance policy.

One great advantage of having at least home and auto insurance bundled is that it may reduce your chances of being dropped if your driving record all of a sudden takes a turn for the worse. Insurance companies are less likely to drop the auto insurance of a customer who has a bundled account.

How Much Cheaper Is It

If large insurance companies have more of your money to invest, they can afford to charge you less. Depending on all the circumstances involved with your driving record, type of car and driving habits along with the type of coverage you have on your house and life, you could save from $3,000 – $5,000 or more every year.

Buying all of your insurance needs from one company may save you a significant amount of money compared with buying from a variety of carriers. An added advantage is less paperwork for you with only one bill to pay. Companies such as State Farm offer a 17 – 22 percent discount for a combination of homeowners, rental and life insurance.

How Insurance Companies Benefit

Insurance companies are willing to give discounted prices for bundled policies because people with this type arrangement tend to stay with the insurance company for years. It is not cost effective for the company to have a high turnover.

Questions to Ask Your Agent

While bundling may be cheaper, buyers need to ask the right questions to make sure they are getting the coverage they need. The company you choose should have expertise in all of the types of policies you plan to bundle. You may not want to bundle if the primary company only covers auto insurance and the home insurance is handled by a different company.

Before your present insurance policy expires, it may be worthwhile looking into bundling with one company. You may be pleasantly surprised at how much lower your insurance costs will be.

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