Glossary
Multi-policy discount, defined
A reduction each carrier applies when the same household places more than one line of coverage with it, most often auto and home, but also renters, umbrella, boat or life. The carrier saves on acquisition and retention costs and shares part of that with the customer.
In practice
The reduction usually appears on both policies and is often the largest ordinary credit available, which is why bundled quotes look attractive. The analysis is the total, not the discount: two policies at one carrier with a bundling credit can still cost more than a strong auto quote plus a strong home quote from different carriers, and the answer changes as each carrier's pricing moves. Some carriers require the home policy to be in force before the auto credit applies, and cancelling one line removes the credit from the other at renewal. An umbrella policy sometimes requires the underlying auto and home to be with the same carrier, which makes the bundle a structural choice rather than a pricing one. Re-quote both ways every few years.
A worked example
Suppose one carrier quotes auto at $1,400 and home at $1,600 with a bundling credit that brings the pair to $2,700. Suppose another carrier quotes the auto alone at $1,000 and a third quotes the home at $1,500, a split total of $2,500. The bundle is $200 more despite the credit, and the umbrella requirement may still decide it. Hypothetical figures.
Applies to: Auto InsuranceHome Insurance