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. Most large companies like State Farm, GEICO, Progressive, Allstate and Farmers offer solid discounts ranging from 3% to 10% for those who get a rental and auto insurance policy with them.
How to Bundle Your Auto and Rental Insurance Policies
Bundling the two policies is quite simple; when you go to file 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
The companies we listed above account for about 80% of all auto insurance customers in the U.S. so it is likely you belong to one of those companies. There are small regional carriers however across the country that may not offer renters insurance policies, meaning you don't have the option to bundle. If you decide to move to an insurance company that allows bundling, you should give your current company 30 days notice. This ensures you won't be billed by the company anymore, and to also prevent a lapse in coverage which we discuss more below. Even if you have an auto policy, we encourage you to shop around anyway to see if you can find a better rate. We'd also encourage you shop around renters rates because you may find you don't even need to bundle.
What is the Cheapest Car and Renters Insurance Company?
GEICO in most of the country will likely be the cheapest 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. State Farm is the usually the lowest costing renters insurance company in cities we have surveyed. Ultimately, it will come down to getting as many quotes as possible for both types of insurance. If you can combine a State Farm renters policy with a GEICO auto policy for cheaper than a bundle at either, 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 for full coverage car insurance in the U.S. was about $1,521 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 actually encourage every car insurance customer to shop around for new insurance at least once every two years, so when you want to bundle with your renters policy may be a perfect time.
Should You Bundle Your Car Insurance and Renters Insurance?
It only makes sense to move companies in order to bundle if your new price will be less than what you are currently paying and/or you can't find a cheaper deal by going with two different companies. While that may seem obvious, there are actually lots of not so obvious factors that may in fact make the move more expensive in the long run. You first need to watch out for cancellation fees. Most large companies do not charge fees, but some like Esurance and Mercury will charge a fee for canceling before your policy is up. You also want to be sure you do not leave a lapse in your car insurance coverage.
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. Telling your insurance company 30 days in advance 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.
There a several advantages as well though to bundling beside just a discount. The first one is a stronger relationship with your insurance company. Should you get into a bit of 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 insurances. Finally, J.D. Power's study of auto insurance company customer satisfaction found that customers with bundled policies tended to be more satisfied with their company than those who didn't have a policy.
If 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 having your insurance at two different companies is dramatically cheaper than bundling under one, like several hundred dollars per year, then you should go with that option. If the price difference is small, the convenience factor may be enough to decide to bundle your policies together.
- J.D. Power 2016 Study
- Renters and auto insurance quotes we obtained online and via phone from insurance companies