Bundling Insurance Policies Can Save 18% on Car Insurance

There are many ways to save on car insurance, and one of the simplest is "bundling" your insurance policies. Large insurance companies usually offer what they call multipolicy, or multiline, discounts on your premiums when you buy multiple insurance policies from them. After you shop around and calculate all of your discounts, bundling might help you get a great deal.

What types of insurance policies can you bundle?

Companies like Geico, State Farm, Allstate and Progressive offer all kinds of insurance: homeowners, renters, condo, life, boat, travel and more. While bundling home and auto insurance is probably the most common, many insurers also offer bundle discounts for other insurance types. But keep in mind: Not every type of insurance can be bundled with your auto insurance policy.

How good is the discount?

Not every bundle is made equal. An auto-home bundle usually yields a greater discount than an auto-condo discount, for example. And some discounts depend on when you buy your policies. Below, we explore the country's four largest auto insurers and the discounts you can score by bundling policies.

State Farm

With State Farm, you may have a bunch of different insurance policies, but they'll only discount one bundle — the one that gets you the biggest discount. We looked at a $1,509 State Farm auto quote from Alabama to test what the discount may look like with a few different bundled policies.

Homeowners insurance can be quite costly — thousands of dollars every year — so it makes sense that it comes with a higher discount than renters insurance. An umbrella policy gives you more liability insurance than what your traditional policy may already offer, but it costs more overall. State Farm is also unique because it will bundle a farm/ranch policy with your auto policy.

Geico

Geico offers a flat 3% discount regardless of the type of policy you bundle — as long as it is a renters, condo, mobile home or homeowners policy. We looked at a quote from New York to show how a bundled policy would affect rates. For our sample 30-year-old male driver, Geico gave a yearly auto insurance quote of $1,546. With the 3% discount, the driver would save $47 per year. In comparison, the same bundle at State Farm would actually save this driver $232 every year.

Allstate

With Allstate insurance, every bundle has a different discount. We looked at auto insurance rates in Ohio to explore the loyalty discount at Allstate. The size of the discount again corresponds to the price of the second policy. Our sample auto quote was $1,056 per year.

Again, homeowners insurance comes out on top because it's generally the most expensive type of insurance.

A notable difference between State Farm and Allstate, however, is the absence of life insurance policies. If you were hoping to bundle an auto policy with your life insurance policy, State Farm would be the company to do so.

Progressive

Progressive allows you to combine multiple lines at once: homeowners, mobile homes, snowmobiles, boats and more. They break down those policies into three different groups. One group consists of all types of "dwelling" insurances (homeowners, renters, condo), while the second group contains secondary vehicles (motor home, snow mobile, boat), and the final group is umbrella policies. The magnitude of the discount depends on when you purchased those secondary policies as well. We looked at quotes from Rhode Island and used a $1,791 annual premium as an example.

Progressive incentivizes customers to buy everything at once to get the largest discount. If you purchased an auto policy along with homeowners, motorcycle and an umbrella within the initial term of your Progressive auto policy, then you would get 17% off the yearly premium. If you do not have a secondary vehicle or umbrella policy to insure, the discount is a relatively paltry 5%.

Having a homeowners policy is also important. If your dwelling insurance is anything but homeowners — such as renters or condo — then expect the discount to drop in half. The 17% discount becomes 9% if you have a renters policy. Without any sort of dwelling insurance — for example, you bundle an auto policy with an umbrella policy — the best discount you can expect is 5%.

Discounts on the secondary policy

The secondary policy, like your homeowners insurance, will also receive a discount. On its website, Allstate claims policyholders receive up to 35% off. At State Farm, we saw a 15% discount. here. Homeowners policies are usually more expensive than what you will pay for auto insurance, so bundling your homeowners insurance with your car insurance can offer a sizable discount on that premium as well..

Final thoughts

The best way to find cheap auto insurance and save money on your annual premium is to shop around. Call the top insurers available in your area and get auto insurance quotes from each to compare. Take inventory of everything you want insured and see which one is the most affordable option after bundling. But remember: There's no point in switching to Allstate, for example, to save 15% if its auto insurance policy is 20% more expensive than your current one. At the end of the day, bundling can be a great way to save if one company is offering you the best prices overall.