Frequently Asked Questions
"What Is Bundling?"
Webster defines it as follows: “to offer together with a related product or service at a package price”. Pretty straightforward for sure and the concept seems to be nicely embraced by the insurance industry. Essentially, property and casualty insurance companies offer three basic types of coverage: homeowner’s, auto and umbrella. If you add a second policy to your coverage, you will be entitled to a discount that will spread across both of your policies.
Things to consider:
-Convenience…less decision making and one stop shopping
-Limited choices….no flexibility must accept what is being offered
- Just because a “discount” is given does not mean it is a good value.
Ted and Amy had their homeowner’s insurance through Company A (annual premium of $1,497) and their auto policy through Company B (annual premium $2,479) for a combined total of $3,975. A neighbor mentioned to them that he received a discount by having both policies issued by the same company. So Ted and Amy investigated. They were very wise in how they approached this. They contacted both Companies A & B and to no surprise, each was willing to offer a bundling discount if they placed the second policy through them. After an apples to apples comparison of coverage and incorporating the discount, Company A offered a bundled price of $3,275 while Company B offered a price of $3,500. Ted and Amy did two things: (1) they saved $700 a year by going through Company A and (2) they thanked their neighbor for the suggestion and he later contacted Company A and was pleased to find out that he was able to save an additional $300 in annual premium.