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What You Need to Know About Bundling Car and Renters Insurance
Insurance makes for a great safety net, but it can get expensive when you look at all the different types we need. For some, auto and renters insurance bundles can help lower that cost. Auto and renters insurance are two common types of insurance, with auto being required for every vehicle. While renters insurance isn’t usually mandated, it can prove a wise investment.
But do you really want to add another bill to the mix? You’re already paying your rent and auto insurance, adding renters insurance to that can seem challenging. One of the common ways to obtain a discount on your auto and renters insurance policies is to bundle them together. It won’t make either policy free, but it can save enough on premiums to lighten the burden.
Pros and cons of bundling car and renters insurance
- Damaged possessions will be replaced
- Added peace of mind if you are liable for property damages
- Liability coverage in the case that a guest is injured
- Insurance may pay for rental costs of a new residence if the current one becomes suddenly unlivable due to a covered accident
- Cost of premiums
- Not all types of incident and damage are covered
- There is a value limit for items that will be replaced
- Possessions are generally replaced at actual cost value instead of replacement cost value
Like many things, renters insurance presents some tradeoffs. The upsides to renters insurance are the coverages and protections it offers. With renters insurance, you can rest more comfortably, knowing that your possessions and living situation are insured against disaster. But renters insurance covers more than possessions. If you have a guest who is injured while visiting you, your policy will likely assist with their medical bills. If your rental home becomes unlivable, your insurance may cover the expense of a new rental place for up to six months or more.
The biggest downside of purchasing renters insurance is the cost. This added layer of protection will require making regular premium payments to keep it in force. The average annual premium for renters insurance is around $180, according to data from the Insurance Information Institute (iii.org). Considering how much this $15 a month protects, the cost of renters insurance is a relatively low downside.
Will my renters insurance be cheaper if I bundle it with car insurance?
Bundling insurance policies together is an excellent way to get a discount on your premiums. If you can bundle your auto and renters insurance together, it will almost certainly come with some savings. One of the reasons behind these discounts is that insurance companies want to incentivize their customers to do more business with them. This motivation ties into the primary restriction around insurance bundling, as explained below.
Some preliminary qualifications have to be met before you can bundle your policies. To bundle two plans, they will both need to be issued by the same company. When you receive a bundling discount, the insurance company is willing to give you a deal in return for purchasing both policies.
There are also some exceptions where bundling may not present a significant discount. Renters insurance often sees lower bundling discounts in high-risk areas, such as hurricane-prone coasts like parts of Florida, or areas with a high risk of fire such as California. These areas represent a higher risk to the insurance companies, which they balance with higher premiums and fewer discounts. Even so, the average cost of renters insurance in California is only slightly higher than the national average.
How do I bundle my insurance?
Depending on where you start, bundling renters and auto insurance can be simple or require a few extra steps. If you already have a renters or auto policy and you don’t want to change companies, then you can skip most of these steps and go straight to the paragraph that follows them.
- Shop around between insurance companies to compare policy prices, coverage and bundling discounts. This ensures you get the best deal for the coverage you want.
- Select a company that offers auto and renters insurance bundles for a price you like.
- Contact an agent at your selected insurance company or go to that company’s website.
- Through the agent or the website, fill out an application for renters or auto insurance.
- If speaking with a live agent, inform them that you would like to bundle renters and auto insurance.
- If using the company website, select the bundling option while completing your policy application.
This is the full guide for obtaining bundled renters and auto insurance when starting from scratch, but what if you already have one policy and don’t want to switch companies? That’s easier, but it does narrow your options. In this case, contact your insurance agent and inform them that you’d like to add and bundle a policy to your existing plan.
Insurance providers that bundle car and renters insurance
- Progressive — Best for coverage options.
- Geico — Best for cost.
- Allstate — Best for customer service.
- Farmers — Best for auto policy customization.
- State Farm — Best for claims satisfaction
What other insurances can I bundle?
Provided the policies are all issued by the same company, most types of insurance can be bundled. Home or renters and auto are the most common insurances to bundle. Still, it is up to the insurance company what they give discounts on. Since these bundling discounts are designed to attract customers, insurance companies tend to offer them on a wide range of policy types.
When trying to save money on your insurance, the best bet is to find a company that offers all of the policy types you want and then bundle them together through that company. This can take some time and research before you find the right company, but the savings can be significant. Remember, the fewer policies you need, the easier this will be, but the fewer savings it will represent.