How insurance plans help you save money

When you “plan” insurance, you will buy two or more policies from the same insurance company and get a discount. You can combine policies for homes, renters, cars, life, and other vehicles such as motorcycles, boats, or RV.

Packing your insurance can bring a number of advantages: Discounts, a clue to payment, and having a provider have a more general view of your insurance needs.

Package Advantage
Car premiums themselves can vary greatly depending on who gives the price. Similarly, you’ll want to compare stores if you’re coming with policies to see the final price with all discounts.

In general, package discounts can be between 5% and 25% and this is usually one of the best car insurance discounts you can get. The most popular packages are auto insurance and home insurance.

John Espenschied, owner of Insurance Brokerage Group in Missouri, said: “The reason insurers are willing to lower prices further is to maintain a better overall business. People who have more contracts with an insurance company are less likely to switch companies, he said.

Reasons not to pack insurance
Merging your insurance policy does not guarantee you will pay less overall. You may find it less expensive to buy home and car purchases from different insurance companies.

Espenschied recommends taking a price from some insurers to compare the gross rate with the non-gross rate.

He said lower rates could be found using two different insurers under certain circumstances.

“This happens about half the time when we cite a family,” he said. “One possible example is a family with young drivers and a family insurance company that may not be able to compete with auto insurance for young drivers in the family.”

In some cases, insurers will offer competitive rates for car insurance but not homeowners’ insurance.

Other cases where packaging may not be cheaper: Collectors and high-value homes.

“For example, an individual who owns an exotic sports car may need to look to an insurance company for expertise to ensure that their sports car is properly insured,” explains Pete Dutch, head of personal line product development at Farmers Insurance. “Similarly, if an individual inherits a luxury home, their auto insurance provider may not have the best price and that individual may have better options when dividing their contracts between multiple insurers.”

If you want umbrella insurance, you’ll probably want to wrap it up. Umbrella insurance provides an additional amount of liability insurance on the base contract. According to Espenschied, an insurance company may require you to have both auto and home insurance to get an insurance policy.

Having multiple policies from the same company can also keep you from renewing. “In these cases, the under-issue may play a role. If you have a car with multiple requirements [in the last three years] and no other policy, then there is a high likelihood that your automotive policy will not be renewed,” Espenschied explained. Customers who have many policies can avoid beheadings.

So when you need an additional insurance policy, start with your current insurer to see how much of its bundled discount is, but this is also a good time to shop.

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