What you need to know about bundling your Alabama home and auto insurance

If you’ve spent any time shopping for home insurance and auto insurance, you may have heard the word “bundling” thrown out there. There are even rumors floating around that bundling can help you save money on your insurance. But maybe you’re skeptical, or maybe you’re asking yourself an important question:

Should I bundle my home and auto insurance?

We’ll go over some of the potential benefits of bundling and some things you need to watch out for if you decide to bundle.

What is bundling insurance?

When you’re talking insurance, bundling means getting more than one type of insurance from the same company. Usually, that means home insurance and auto insurance. So, it’s pretty straightforward.

4 reasons to consider bundling

1. You could save money on your insurance.

Many insurance carriers offer a discount for bundling your home and auto insurance. This discount allows you to get a certain percentage of savings simply by purchasing homeowners and auto insurance from the same company.

Of course, each company offers different prices – and different percentages of savings. So you should shop for your insurance and compare your coverage options and rates from various carriers. (And our Birmingham Insurance team would be happy to help with that – all you have to do is fill out our online form.)

renting a car bundling auto and home insurance

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2. Bundling means you’re only working with one insurance company.

There are some potential conveniences that come along with bundling. Since you’re insured for both home and auto with the same company, you might be able to…

  • Have your home and auto insurance on the same bill.
  • File one claim if both your house and car are affected by the same loss, such as a bad storm.

Again, each company is different. You’ll have to do some investigation to see how bundling works at the various carriers you’re considering. Figure out how billing and claims work there if you bundle.

3. The insurance company may have a single deductible requirement.

Quick definition of deductible:

Your deductible is the amount you agree to pay if you file a claim. Your insurance company will cover the cost of the claim (up to your policy’s limit) minus your deductible. If you have a $1,000 deductible and you file a claim for $8,000 total, you’d have to pay your $1,000 and the insurance company would pay $7,000.

Why does this matter for bundling?

Well, the thing is that your home insurance and your auto insurance both have separate deductibles. Let’s say you weather a bad storm that causes lots of damage to both your home and your car. If your home insurance deductible is $1,000 and your car insurance deductible is $500, you’d end up paying $1,500.

But the insurance company may have a single deductible requirement if you bundle, which means that you would only have to pay one deductible if you have a loss that damages your home and car instead of two. (Keep in mind that you’ll probably have to pay the higher of the two.)

So, check and see if this is the case at the carrier you’re considering.

4. You may be able to bundle renters’ insurance.

If you rent your home or rent an apartment, you might be considering renters’ insurance. And since you have a car, you also need auto insurance.

Why not get both from the same company?

Bundling renters’ insurance may not offer the same savings as bundling home insurance because renters’ insurance is less expensive. But it’s definitely worth doing some research.

bundle home insurance and auto insurance

Watch out for the following things when you bundle:

1. Make sure both policies have high enough limits of coverage.

It’s important to check the coverages and limits of insurance on both your home and auto policies. Make sure you know what’s covered and what’s not covered, and make sure that the limits offered on each policy are high enough to protect you from life’s unexpected disasters. Does each policy offer the coverages you want? Do you need to add any coverages?

You should get enough home insurance to completely cover the costs of rebuilding your home if it were destroyed in a fire. You also need enough insurance to replace all your personal belongings and cover your liability.

For auto insurance, the goal is to have enough insurance to completely cover the expenses of an accident. That means getting enough insurance to cover your legal liability to the other driver and cover the cost of repairing and replacing your own car.

2. Check that both lines of coverage are from the same carrier.

Some carriers go through a third-party company to get one of the lines of coverage when you bundle. While you’re still bundling your insurance, you would again have to work with two companies. And that might not end up being terribly convenient.

3. You should still shop around to get the best rate on your insurance.

There’s a good chance that bundling can help you get some pretty significant savings. The discount could make it well worth it to bundle.

But everyone has a unique insurance situation, so you still need to shop for your insurance. It could be less expensive for you to shop for the best rate for your home and auto separately.

When you go shopping and consider your options (bundling vs. not bundling) make sure that you’re comparing the same coverages, limits, and deductibles. That’s the only way to make sure you’re truly finding the best insurance at the best price. (And don’t sacrifice coverage for the sake of a lower price.)

Speaking of shopping for your insurance, our team would be more than happy to help you get some Alabama home insurance quotes. We’re pros at getting people great coverage at a great rate. To get started with some quotes, fill out our form or call us today.

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