Does Combining Your Home Insurance and Auto Insurance Save?

Auto Insurance Austin, TX – Very often I hear people say “I have my car insurance, home insurance, and life insurance in a package, therefore I must be getting the best deal.”  The reality is that this is not necessarily the case. 

Insurance companies have convinced consumers that by bundling all of their insurance products with one company, they will get the best rate.  The reality is you may be paying more by having everything combined.  Insurance companies know customer are less likely to change when all the products are bundled.  Therefore, insurance companies may justify increasing your rate for your home insurance while keeping the same rate for your auto. 

Think of it this way; what is the likelihood you will change banks when you have your: credit card, checking and savings account, car loan, mortgage, online banking, etc, probably not, its too much hazel.  Insurance companies know consumers are slow at making any kind of drastic change.

Insurance companies know the statistics of a customer leaving if per say, they increase the rate on the home insurance, but not the auto insurance and/or increase the auto insurance, but not the home insurance.  They use this tactic to increase your rate and have you convinced you are getting the best deal.

Insurance companies may raise your rate a few percentage points per year.  Compound this increase by a few years and you have a drastic change in price.  Money you could have saved if you just shopped your rate periodically.  

Life and Health Insurance Bundle:

Be aware of this, because you have your auto and home insurance with a particular company, does not mean you will get a discount on your life insurance.  Unlike property and casualty insurance (auto and home insurance) which is based on loss ratios and recurring risk and hazards, life insurance is based on mortality tables based on what statistics say a particular demographics’ life expectancy.  Life insurance is a product you should definitely not believe you are getting the best price when it is bundled with your home and auto insurance.

On the health insurance product, the companies who offer health insurance are usually not the ones who offer auto, home, and life insurance because these are completely different types of business.  There are a few companies who do offer all of these products, but I have seen they are usually not competitive on all the products at the same time, so what out!

I am not saying you should not bundle all your policies together.  I am advising not to believe you are getting the best rate because you have your policies bundled.  I am also not saying that insurance companies are evil and should not be trusted, the fact is the home, auto, life, and health insurance are all completely different types of businesses with different methods of pricing and it is very unlikely that one company will be the best at all of it.   

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