People often ask if they should buy homeowner insurance and car insurance from the same company? There is a compelling reason to get both policies from one company, but often times it’s not the money saving discount that most people think it is.
Why You May Want to Buy Homeowner Insurance From Your Car insurance Company
There are a few reasons you may want to buy homeowner insurance and car insurance through the same company. These reasons include:
- Easier to coordinate umbrella coverage over both home and auto insurance
Discounts are listed last for a reason. While saving money may be the primary reason people buy both types of coverage from one insurance company, the actual savings may not be as much as it appears to be. Here’s why.
Some companies offer, even advertise, discounts if you buy both types of insurance from them. Discounts of 15% or more are often advertised. However, if you don’t shop the auto and home insurance prices with other companies, you don’t know if the discount is actually saving you money. Here’s an example:
As a bundle, Company X offers car insurance for $1,000 and home insurance for $1,400. When bundled , they offer 15% off the home insurance. This comes to a combined price of $2,190. Alternatively, Company Y offers car insurance for $1,000. Company Z offers home insurance for $1,000. Together you would pay $2,000, but don’t get a discount. In this case, the unbundled insurance saves you $190 per year.
Pricing schemes such as this are not uncommon with insurance. For consumers that don’t have the time or interest in shopping their insurance, the bundled approach seems like a great deal.
If you have a high net worth, getting umbrella coverage is important. Umbrella coverage is easier to get when one company insures both your cars and home. Also, having umbrella coverage aligns your insurance company’s interests with yours. Now they’re on the hook for a larger sum of money. When you need the protection, you want an insurer that is tightly aligned with your needs. We rate this as the number one reason to buy both auto and home insurance from one company.
Why You Might Not Want to Buy Homeowner Insurance From Your Car Insurance Company
Companies specialize in different types of products. For example, a company that does an excellent job of insuring different types of drivers may not do well in servicing customers buying home insurance. That means consumers need to consider what is most important to them. Some of the key points to consider include:
- Is your home costly and would it cost more than one million dollars to replace?
- Do you have a large amount of equity in your home?
- Do you have special needs for car insurance, such as:
- A poor driving record
- Expensive cars
- Teen drivers that you want to include on your policy
While the property-casualty insurance market is a generalized market, the reality is that many insurance companies are more specialized than consumers realize. One problem consumers face when buying insurance is that insurers do not clearly identify their target customer. This leaves consumers believing all insurance companies are the same.
Helping Consumers Select the Best Insurance for Them
Finally, through data analytics, there’s a service that helps consumers know which insurers would serve them best. ValChoice analyzes every car and home insurance company in all 50 states. We identify which companies specialize in the following types of business:
- High-priced homes vs. more typical homes
- High-risk drivers vs. medium risk and low risk drivers
This service guides consumers through an easy selection process of which companies are best for you. All you need to do is click the buttons below to compare your current home and auto insurance to the best providers in your state.
Note: ValChoice does not receive any form of compensation from insurance companies for presenting them as a good option in our car and home insurance reports.