Why bundling insurance policies is not always profitable
If you've heard it said once, you’ve heard it a million times: “bundling your policies will save you money”. But is this actually always the case? The short answer is yes, often bundling your policies together with the same company, whether you’re putting multiple vehicles on an auto policy, or combining your home, auto, and life insurance policies, you can save an average of 15% overall, depending on the provider. However, bundling may not always been in your best interest, as there are a number of exceptions to the rule, preventing your from obtaining the best deal on your coverage.
Missed discounts elsewhere
When bundling all your insurance needs together, you may be missing out on beneficial discounts from other companies. Depending on the discounts that another insurer may offer, they may save you more than the discounts associated with bundling your polices. Looking into alternative discounts outside of bundling is an especially good idea if you have gone through a recent lifestyle change that could impact your insurance. For example, getting married (or divorced), having kids, or changing your commute, may impact your insurance premiums and there may be an insurer out there that offers discounts for your particular lifestyle.
Decrease in actual coverage
At face value, the discount associated with bundling your policies may seem desirable, however, depending on your previous coverage you may be in for a shock if you have to put forth a claim on your new policy. Bundling can save you money up front, but it might mean unknowingly signing up for a new policy with lesser coverage that can cost you more out of pocket when it comes time to file a claim. When looking to bundle your policies, it is imperative to ensure that you are maintaining the same level of coverage as with your previous policy.
Policy becomes stale
Yes, bundling all your insurance needs with one provider is convenient, however that convince can cause your policy to become stale if you become too complacent. After a while of having the same policy with the same insurer, you may find that it no longer meets the needs of you and your family, or that even though you are still receiving a discounts for bundling your services, your premiums may be rising.
Stops you shopping around
Much like with missing out on possible discounts else where, bundling your insurance can stop you from shopping around and finding a policy with another provider that may better fit your needs. Without shopping around, you may be missing out on policies that have better rates for the coverage you need, or possibly even a better bundling system. When looking for the best price for the coverage you need, shopping around is your best practice to finding the ideal provider for you.