To protect yourself from life's perils, we would recommend you have insurance for both your car and rental home. Car insurance is mandatory in mostly every state, while renters is strongly encouraged. Luckily, you can save on both by bundling your purchase with one insurer. Most large companies like State Farm, GEICO, Progressive, Allstate and Farmers offer solid discounts ranging from 3% to 10% for those who get both a rental and auto insurance policy with them.
How to Bundle Your Auto and Rental Insurance Policies
Bundling two policies is quite simple: When you're shopping for a renters or car insurance quote, the company will usually ask you if you would like to bundle your policy with the other. If you currently don't have either policy, you have the flexibility to go to whatever company suits you best. It is more likely you will already have a car insurance policy however, since auto insurance is mandatory mostly everywhere. In that case, you can just obtain a renters quote from your company and see how much of a discount you would receive. The following auto insurers allow you to bundle the two policies.
Insurance Companies that Bundle Renters and Car Insurance Policies
- State Farm
- Liberty Mutual
- Erie Insurance
- American Family
- The Hartford/AARP
- Auto Owners
- State Auto
- Ameriprise Insurance
- Kemper Direct
The companies we listed above account for about 80% of all auto insurance customers in the U.S., so if you're a car owner you likely have a policy with one of those companies. However, you may not have the option to bundle if you're covered by a smaller regional carrier that doesn't offer renters insurance policies. In this case, if you plan to purchase renters insurance, it may be worth investigating a quote with insurers who offer bundling discounts to see if you can get a lower overall price for your insurance. Even if you already have both auto and renters policies, you should shop around to see if you can find better rates. In fact, your shopping may lead you to conclude you don't even need to bundle. Bundling policies with the same insurer is most likely to provide the biggest discounts, but you should always compare quotes, as it's possible that independent policies with two different insurers could provide you the best combination of price and coverage.
If you decide to change your insurance company to take advantage of a bundle discount, you should give your current company 30 days notice. This ensures you won't be billed by the company anymore, and also prevents a lapse in coverage, which we discuss more below.
An Auto and Renters Insurance Bundles Is One Of Many Multi-Policy Insurance Options
If you're in need of multiple insurance policies, the auto and renters insurance bundle is just one example of the many bundled insurance packages companies will offer to increase their business and lower your premium. For instance, if you're looking to increase your liability coverage beyond that included in your renters insurance policy, you may have the option to bundle a personal umbrella policy with your renters or auto insurance—or bundle all three together—to find further discounts.
As a general rule, bundling more expensive policies together tends to provide bigger discounts. Since home insurance and auto insurance are typically two of the more expensive policies consumers will buy, home and auto insurance bundles tend to provide the biggest discounts. Given that renters insurance is comparatively cheaper than home insurance, a discount for a car and renters insurance quote might not be as large as one for a car and home insurance quote, but bundling any type of insurance policy can be an effective way to save money.
What is the Cheapest Car and Renters Insurance Company?
In most of the country, GEICO will likely be the cheapest auto and renters insurance bundle combination despite having one of the smallest reported discounts. GEICO was the cheapest car insurance provider in nearly 37% of all 2,700 cities we surveyed for auto insurance rates. For renters insurance, State Farm is generally the lowest costing renters insurance company in cities we surveyed. Ultimately, it will come down to getting as many quotes as possible for both types of insurance. If a combination of a State Farm renters policy and a GEICO auto policy is cheaper than the bundle discount quote for either individual insurer, then you should go with that option. The following are the cheapest car insurance and renters insurance companies based on our survey of over 2,700 cities.
|Company||Average Yearly Car Insurance Rate||Average Yearly Renters Insurance Rate||Discount||Total Payment|
Overall, we found the average cost of car insurance in the U.S. was about $1,512 per year while the average cost of renters insurance is $187 per year. Even if your current auto insurance company offers bundling, you should not assume they offer the lowest cost policies around. In major cities, where most renters reside, the difference between the costliest and cheapest insurance company averages over $3,000. We encourage every car insurance customer to shop around for new insurance at least once every two years, and this biennial search is the perfect time to look into the possibility of buying a renters insurance policy to bundle and save.
Should You Bundle Your Car Insurance and Renters Insurance?
As a general rule, it only makes sense to bundle auto and renters insurance if your new price will be less than what you are currently paying or you can't find a cheaper deal by going with two different companies. While this seems straightforward, there are also many less obvious factors involved in changing insurers that can make it more expensive in the long run.
First, you need to watch out for cancellation fees if you're changing insurers in order to bundle your policies. Most large companies do not charge fees, but some like Esurance and Mercury will charge a fee for canceling before your policy is up. For the first year of a new policy and insurer combination, you should count a potential cancellation fee against your savings.
You also want to be sure you do not have a lapse in your car insurance coverage if you switch insurers to bundle. If you cancel your auto policy and your coverage is dropped right away, you will have a lapse. As we found, rates are 8% more expensive when you had a lapse in coverage for less than 30 days, and a full 29% when its been lapsed for more than 30 days. Informing your insurance company 30 days in advance of a switch will help prevent this problem, but you should make sure you have already decided which car insurance company you are going with by the time you are ready to cancel.
However, outside of the discount, there a several advantages to insurance bundles you should consider when making your decision. The first one is a stronger relationship with your insurance company. Should you run into some bad luck and have a couple accidents in a short amount of time, your company will be less likely to drop you if you have a secondary policy with them. There is also a convenience factor of receiving one bill for both insurance policies when you're a multi insurance customer. In addition to more competitive prices, these factors likely contribute to the finding by J.D. Power's study of auto insurance company customer satisfaction that customers with bundled policies tended to be more satisfied with their company than those who don't bundle insurance packages.
After getting at least three to five quotes from renters and car insurance companies in your area, you should be able to determine whether bundling is right for you. If, as is likely the case, bundling your auto and renters insurance policies results in the cheapest overall price, the combination of convenience and value makes bundling these policies an easy decision. If holding your auto and renters insurance policies at two different companies is dramatically cheaper than bundling under one, in the order of several hundred dollars per year, then you should go with that option. If it's only slightly cheaper to buy auto and renters policies at two different providers, the convenience factor may be enough to tilt your decision toward bundling your policies together.