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Insurance can protect you from financial peril, but at a cost. Bundling not only saves money but also provides these surprising perks.
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You’ve probably heard that bundling your auto and home insurance will save you money, but do you know how much you can save? Typically, the discount is at least 5%, with some companies rewarding you with a discount of up to 25%. That discount represents a significant chunk of money you can divert to an emergency savings account or other financial need. However, there are more advantages associated with policy bundling than how much you’ll save. Here, we examine a few.
What is policy bundling?
Policy bundling refers to purchasing multiple policy types from a single insurance company. For example, if you purchase auto and homeowners insurance from the same company, you’re bundling. To thank you for buying more than one policy, insurance companies typically offer a discount. While that discount can be quite sweet, it’s not the only incentive to bundle.
1. Convenience
Chances are, you have a fair number of bills to juggle each month. One of the biggest perks associated with bundling is the fact that one company becomes your one-stop shop for all things insurance. In fact, if you don’t yet have a life insurance policy, you can ask your agent about adding an inexpensive term policy to your bundle.
Now, instead of keeping track of several different insurers, you know that everything is under one roof. If you have any questions, you have one agent to call. If you have any concerns, you know where to turn. Bundling makes managing your policies easier.
2. Fewer agents to deal with
This second perk is a gem. If you’re someone who dislikes working with salespeople, find an insurance agent you like, check out their company, and imagine dealing only with them. Once you’re settled with a company, and your policies have been bundled, you have someone you trust to turn to when an issue arises.
Anyone who’s ever experienced an emergency situation recognizes how comforting it can be to see a familiar face and know that person is there to handle their insurance needs. Imagine that your car has been totaled, but you managed to escape unharmed. Still, you’re shaking and not sure you’re thinking clearly. As you wait, you give your auto insurance company a call, and within 20 minutes, your agent is on the scene.
When all your policies are handled by a single agent, that person is likely to be more invested in any case involving you.
3. Less likely you’ll be dropped
Let’s say you have a teenage driver who is involved in their second fender bender of the year and receives a traffic violation. It’s within an insurance company’s rights to drop you as a policyholder or to choose not to renew it when the time comes. However, since you have multiple policies with the same company, the company views you as a dependable customer and is less likely to drop you.
4. You may be able to combine deductibles
According to the National Association of Insurance Commissioners (NAIC), some insurance companies offer combined deductibles. If your insurance company offers combined deductibles, it means that you only have to pay one deductible when both losses are caused by the same event.
For example, if a tornado were to damage your home and car, you would not have to pay a deductible toward the repair of each. Instead, you would pay one deductible.
If bundling sounds good to you, ask your insurance agent about bundling all your insurance needs, from renters insurance to boat and motorcycle coverage. You’ll not only save money, but you’ll simplify your life.
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