How to bundle home and auto insurance

Bundling is the plain word for holding two or more policies with the same carrier and receiving a multi-policy discount on each. The carrier offers it because a household with two policies is more profitable to keep and less likely to leave, and the discount is real: it is a percentage taken off each policy's premium, and on the home policy in particular it is often the single largest discount available. The catch is that the discount is applied to that carrier's own price, and a carrier that is expensive on the home and cheap on the auto can still lose to two carriers that are each cheap on one.

So the exercise is a comparison, done carefully once, rather than a decision made on the word itself. This guide runs through it: what to gather, how to get like-for-like quotes, how to deal with two renewal dates that do not match, what changes on the umbrella, and when the recommendation is to keep the policies apart.

What to gather

A bundle comparison is only valid if every quote is built on the same facts and the same coverage.

• Both current declarations pages, with the premium, limits, deductibles and endorsements on each, and the renewal date of each.
• The current discounts listed on each policy, so you can see which will survive a move and which will not: claims-free, loyalty, paid-in-full, paperless, telematics, and any existing multi-policy discount if one policy is already bundled with something else.
• For the home: year built, roof age, square footage, updates to systems, protection class, and the mortgage lender's details. For the autos: VINs, drivers, annual mileage and the garaging address.
• Claims history for both, for the past several years.
• The umbrella declarations page, if you have one, because its carrier may require the underlying policies to be with it or with an approved carrier.

Step one: get the separate best quotes first

Before quoting any bundle, find the best separate quote for the home and the best separate quote for the autos, each on coverage identical to what you hold. That pair is the benchmark. Without it, a bundle quote has nothing to beat except the current premium, and the current premium may itself be high. An independent agent does this in one pass across the carriers it represents; doing it yourself means requesting quotes from several carriers and holding the coverage constant each time.

Identical coverage means the same dwelling limit and valuation basis, the same contents limit, the same liability limits on both policies, the same deductibles, the same endorsements such as water backup, scheduled items or rental reimbursement, and the same uninsured motorist limit. A quote that arrives lower because one of these quietly changed is not a lower quote.

Step two: quote the bundle at each carrier that writes both

Now ask each carrier that writes both lines for the combined price, with the multi-policy discount applied to each policy. Ask for the two policies to be shown separately with the discount on each, not as a single figure; you need to see where the discount lands. Compare the combined total with the sum of the two separate benchmarks. The bundle is worth taking when the combined total is lower, after counting the discounts you would lose by leaving the existing carriers, and after noting any difference in coverage or in the carrier's claims handling that matters to you.

Some carriers offer the discount when the policies are with different companies inside the same group, and some grant it for a home with a renters or condo policy, or an auto with a motorcycle or RV. Ask what qualifies. A few carriers also offer a single deductible for a loss that hits both the house and the car, such as a hailstorm or a house fire that reaches the garage; where that is available it is a meaningful benefit that a separate-carrier arrangement cannot match.

Step three: line up the renewal dates

Home and auto policies rarely renew on the same day, and an auto policy may run six months while the home runs twelve. The clean way to bundle is to move each policy at its own renewal and have the carrier hold the multi-policy discount on the first one on the promise of the second. Most carriers will do this for a stated period; ask how long, and get it in writing, because if the second policy never arrives the discount on the first is removed and the premium adjusted.

Moving a policy mid-term to make the dates match is possible but can carry a short-rate cancellation penalty on the policy being cancelled early, which eats into the discount in the first year. Work out the penalty before choosing the mid-term route. If the two renewal dates are within a couple of months, waiting for the second is usually cheaper than paying the penalty. Whichever route you take, bind the new policy before cancelling the old one, with the same effective date, and confirm the lender has the new home declarations page before the old policy ends.

Step four: bring the umbrella and everything else along

An umbrella policy sits above the home and auto liability limits and often requires the underlying policies to be with the same carrier or with one the umbrella carrier approves. If you are moving both underlying policies, quote the umbrella with the new carrier at the same time; a third policy usually deepens the multi-policy discount, and it removes the risk of an umbrella that no longer recognises what sits beneath it. If the umbrella stays where it is, tell its carrier the new underlying policy numbers and limits and ask it to confirm in writing that they satisfy its requirements.

Then check the smaller policies that ride on the household account: a motorcycle, a boat, a second home, a personal articles floater for jewellery. Each may qualify for the discount, and each has its own renewal date that needs the same care.

When to keep the policies separate

Bundling is not always the answer. Keeping the policies apart is the right recommendation in these cases.

• The bundled total is higher than the two separate benchmarks, which happens more often than the marketing suggests, particularly where a carrier is strong on auto and weak on property.
• The home is hard to place: an older roof, a wildfire interface address, a prior water claim, a manufactured home. The carrier that will write it well may not write autos at a good price, and the property coverage matters more than the discount.
• A young or high-risk driver in the household pushes the auto premium up sharply with the carrier that is good on the home. A separate non-standard auto policy for that driver, with the household's other policies elsewhere, can be the cheaper structure.
• A claims-free or long-tenure discount on one existing policy is larger than the multi-policy discount would be, and it does not transfer.
• The carrier that wins on price has a claims reputation you do not want to depend on for the house.

Common mistakes

Each of these turns a bundle from a saving into a cost.

• Comparing the bundle to the current premium instead of to the best separate quotes.
• Accepting a bundle quote in which the dwelling limit, the deductible or the liability limits differ from the current policy.
• Cancelling the first policy mid-term without asking about the short-rate penalty.
• Assuming the discount lasts if the second policy never moves. It is removed, and the first policy is rebilled.
• Forgetting the umbrella, and finding after a claim that it did not recognise the new underlying carrier.
• Treating the bundle as permanent. The discount is applied to each year's price, and each year's price can drift; the comparison is worth repeating every few renewals.

A worked example

Suppose a family in Henderson pays $2,100 for a home policy renewing in March and $1,900 for two cars renewing in September, with different carriers. The best separate quotes on identical coverage come back at $1,950 for the home and $1,700 for the autos, a benchmark of $3,650. Two carriers write both lines. Carrier A quotes $1,800 for the home and $1,750 for the autos after the discount, a total of $3,550. Carrier B quotes $2,050 and $1,450, a total of $3,500, but its home quote drops the water backup endorsement; with it restored the total is $3,580. Carrier A wins by a small margin and keeps the coverage whole. The family binds the home with Carrier A in March and asks it to hold the multi-policy discount until the autos move in September; the carrier confirms in writing that it will hold it for a year. In September the autos move, the umbrella moves with them for a further $40 saving, and the first full year costs $3,510 against $4,000 before. Had Carrier A's bundle come in above $3,650, the advice would have been to take the two separate quotes and skip the bundle. The figures are illustrative.

How to use this

Send us both declarations pages and we produce the benchmark, the strongest separate quotes on identical coverage, and the bundled quotes from every carrier we represent that writes both lines in Arizona, Nevada, Utah and Idaho, laid side by side with the dates and any penalties worked out. Where the split arrangement is cheaper or places the home better, that is what we recommend, and the current policies stay where they are.