3 Ways Your Insurance Bundle Isn't As Cost Effective As You Think


Going With An Insurance Bundle Won’t Always Get You The Best Deal

With the overwhelming amount of insurance policies out there – home, auto, life, health, travel, earthquake, etc. – sticking with a single company to cover all your assets seems like the easiest choice. Add all the commercials and billboards claiming to save you money by bundling and these insurance bundles look even better. But are these deals really as good as they claim? According to Amy Bach, executive director of United Policyholders, insurance companies use bundles to get more business from you and therefore make more money (insurancequotes.com). So all that money you think you’re saving might not be as significant as it appears. Here’s how insurance companies dupe you with offers to bundle.

1. Lower Rates Can Mean Hidden Fees

In order to recoup losses from offering you a lower rate up front, some companies will tack on mandatory add-ons to their bundled policies. Your Family Finances warns that these extras can include valuables coverage, roadside assistance or even rental car reimbursement. It’s important to read through your policy or ask your insurance agent if there are any add-ons or restrictions required to receive your bundle discount.

2. Insurance Rates Are Always Changing

Everyone knows that tickets and accidents can cause your auto insurance to rise and that having a baby entitles you to different health insurance benefits. However, there are other causes that can affect your insurance policies without you even knowing about them. Did you know that age, credit, and marital status can all increase your auto insurance rate?. Or that where you live can affect your life insurance? I bet you weren’t even aware that medical spending directly influences your health insurance premium. With so many contributing factors it would be smart to regularly update and check your insurance to make sure you are getting the best coverage, even if your policies were bundled.

3. Freestanding Insurance Companies May Have Lower Rates

The J.D. Power and Associates 2011 U.S. National Auto Insurance Study revealed that “satisfaction with price among auto-only insurance customers is now comparable to levels once reserved for customers who bundled auto and homeowners policies.” This can be due to some auto-only insurance companies competing with bigger multi-policy companies by undercutting their rates and offering various discounts. In this case, bundling your policies would most likely do more harm than good.

Comparison Shopping For The Best Coverage

Fluctuating rates and new discounts are constants when it comes to insurance. Even if you took advantage of the best deal at the time by bundling your policies, several months down the line something better likely popped up. In order to be sure you’re getting the best deal possible, do a little research and compare all your options, or get in contact with an insurance broker. It might be easier to just stick with the company you already have and not bother looking for cheaper rates, but being able to save money where you can could be worth the hassle of dealing with several companies at once.

Date of original publication:
Updated on: September 05, 2016

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