Cash News
Insurance is one of those things we know we should have but don’t like to spend money on, so finding a way to save is important.
We see ads all the time about “bundling” home and auto insurance with the same company to save money. But what about renters, can they also save by bundling auto and renters insurance?
“It’s a great way to save,” said Mark Friedlander, director of corporate communications for the Insurance Information Institute. While the type of savings you receive depends on the company, Friedlander says it doesn’t matter if it’s “a single-family home, a condo, or a renters policy, it’s all under that umbrella of home and auto. If you already have an auto policy with a certain insurer, you can bundle and get discounts on both the auto and renters policy.”
Learn more: How does car insurance work? The basics explained.
Rates for both renters and auto insurance vary depending on the state you live in.
Learn more: How does your ZIP code affect your car insurance?
According to the latest available data from the Insurance Information Institute, the most expensive average renters insurance premium was $258 a year in Mississippi. The least expensive average premium was $117 a year in South Dakota. The national yearly average was $170, or just over $14 each month.
For auto insurance, New Yorkers paid the most at about $1,511 per year, and North Dakotans paid the least at about $692. The national average price was about $1,062 a year.
Learn more: How to get all the best car insurance discounts
Since renters insurance is relatively inexpensive, just having it and triggering the multi-policy discount could make it pay for itself.
According to Progressive, their average renters insurance premium is between $13 and $27 per month.
State Farm says their average monthly premium is $13 for $34,000 of renters insurance.
“You could literally pay for your renters insurance with the discount you’re getting off your auto in most cases, just because the cost of auto insurance today has gone up,” Friedlander said. “That’s a benefit of bundling right there.”
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Most of the nation’s big insurers promote the bundling of policies, including renters and auto insurance, claiming substantial savings for customers.
State Farm, the company with the most auto insurance policies in the United States, according to Insurance Information Institute data, says having both auto and renters insurance can save you up to $704.
Progressive claims up to 20% savings.
GEICO says bundling “can unlock substantial savings.” You’ll have to reach out to the insurer direcrtly to learn exactly how much.
Allstate promotes bundling discounts for auto and renters insurance on their site, but you will need to plug in some personalized information to get a quote.
USAA says bundling the two types of insurance policies can save up to 10%.
Liberty Mutual says bundling both homeowners and auto insurance policies could save up to $950, but you’ll need to enter more information on their site to see just how much bundling renters and auto insurance can save.
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The most common bundle is homeowners/renters insurance and car insurance. Some insurers call it multi-policy savings. The amount of savings will vary because of the hundreds of companies offering bundles, Friedlander says.
“The auto policy typically costs more in premium because auto insurance is more expensive certainly on average than a renter’s policy,” he explains. “But the bottom line is, it gives you an opportunity to save on both and you’re clearly going to see the bigger savings on the more expensive policy.”
The discounts can grow if you add other policies like a boat, motorcycle, or life insurance policy.
“There could be other combinations. If your insurance company sells all different types of products, you might have other bundling opportunities as well.”
In addition to financial savings, there is also the peace of mind of having one company take care of your insurance needs, meaning only one online login or phone call is needed if you want to make payments, file claims, or adjust your policies.
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Convenience alone might not make bundling worth it. Sometimes buying two insurance policies from two different companies is cheaper than the bundling discount would be with one company.
“The bottom line is, if you’re trying to save, sometimes it pays to get the coverage separately,” Friedlander said. “It’s a pretty straightforward math equation. Where are you going to find the most savings, buying policies separately or bundling and getting a discount on both. You have to weigh what’s a better deal.”
Managing multiple insurers might not be too tough because of mobile apps and other digital tools to manage accounts.
“It’s really not that difficult to manage two separate policies, to be honest,” Friedlander said. “Is it worth it to have everything under one company versus two even if you’re paying more, that’s an individual decision.”
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How much of these bundling savings actually happens?
“Don’t assume anything,” said Friedlander. “The savings is automatic in many cases, but is it 100% guaranteed? No. It’s best to check and make sure. All it takes is a simple call to your insurance agent to make sure that you’re getting discounts on both policies.”
Just remember, if you choose to drop one policy for whatever reason, your discount goes away.
While there’s a chance making a claim on one policy could impact your discount, GEICO, for example, says, “Filing a claim on one policy in a bundle typically does not affect the other policies or the overall discount. However, this can vary by provider, so be sure to discuss specifics with them.”
Renters insurance usually covers more than just your personal property. It also often has personal liability and living expenses coverage.
The Insurance Information Institute strongly recommends a renters insurance policy, especially since it comes at a low cost.
“You are not protected at all inside your rental unit if you don’t have it, and many people don’t realize that,” Friedlander warned. “They think they’re leasing from a rental company, and they don’t really consider their personal property. They think everything’s covered. The building is covered by the landlord or the property manager, but in your individual unit, you need your own coverage.”
Overall, having both renters and auto insurance with the same company could lower your car insurance rates enough to pay for the renters insurance. You’d save some money and have the peace of mind knowing your personal property is covered.
This article was edited by Tim Manni