Should I bundle my insurance policies?

Insurance Bundling: Does It Actually Save Money?

Insurers push bundles hard because they lock in your business. But the math doesn’t always favor bundling. Here’s how to calculate whether bundling saves you money or costs you.

The Bundle Math

How bundle discounts work:

Looks great, right? But consider this:

In this case, separate policies save $95 more than bundling.

When Bundling Wins

Bundle discounts beat shopping separately when:

1. The bundling company has competitive base rates for BOTH auto and home
2. The discount is substantial (15%+ on both policies)
3. Your situation is “average” - unusual risks may be better with specialists
4. Convenience matters - managing one insurer saves mental energy

Example where bundling wins:

• Company X auto: $1,300 (competitive)
• Company X home: $1,100 (competitive)
• Bundle discount: 20%
• Bundle total: $1,920

vs.

• Best auto elsewhere: $1,200
• Best home elsewhere: $1,000
• Separate total: $2,200

Bundle saves: $280

When Separate Policies Win

Shopping separately beats bundling when:

1. Insurers specialize - Best auto company isn’t best home company
2. You have unusual needs - High-value home, classic car, etc.
3. Bundle base rates are inflated - Some insurers price high, then “discount”
4. Regional differences - Some insurers dominate specific markets

Example where separate wins:

• Best auto (GEICO): $1,000
• Best home (local mutual): $900
• Separate total: $1,900

vs.

• Bundle company auto: $1,400
• Bundle company home: $1,200
• 15% bundle discount: -$390
• Bundle total: $2,210

Separate saves: $310

The Shopping Strategy

Step 1: Get your baseline

• Current auto annual premium: $____
• Current home annual premium: $____
• Current total: $____

Step 2: Quote bundles from 3-5 insurers

• State Farm bundle: $____
• Progressive bundle: $____
• Allstate bundle: $____
• USAA bundle (if eligible): $____
• Local/regional: $____

Step 3: Quote best separate policies

• Best auto quote: $____ from ____
• Best home quote: $____ from ____
• Separate total: $____

Step 4: Compare

• Best bundle: $____
• Best separate: $____
• Winner: ____

Bundle Discounts by Insurer

Typical multi-policy discounts:

Important: Discount percentage doesn’t matter if base rates are high.

The Convenience Factor

Real value of bundling beyond price:

Quantifying convenience: If managing two insurers costs you 2 hours/year of hassle, and your time is worth $50/hour, that’s $100 of value. Add that to your comparison.

The Risk of Bundling

What you give up:

1. Best-in-class coverage for each need - One insurer can’t be best at everything
2. Negotiating leverage - Harder to threaten to leave
3. Claim dispute risk - If you fight them on auto, your home policy is with them too
4. Rate hike exposure - They raise one, they might raise both
5. Service quality variance - Great auto service doesn’t mean great home service

Multi-Policy vs Multi-Line

Understand the terms:

• Multi-policy discount: Discount for having 2+ policies (auto + home)
• Multi-line discount: Same thing, different insurer terminology
• Package policy: Policies designed to work together
• Umbrella eligibility: Often requires underlying policies with same company

Some umbrella policies require bundling: If you want umbrella coverage ($1M+ liability), many insurers require your auto and home policies with them too. Factor this in.

The Annual Review Strategy

Best practice:

1. Year 1: Shop extensively, find optimal setup
2. Annually: Re-quote at renewal time
3. Every 2-3 years: Do full market comparison
4. Life changes: Re-shop when you move, buy, marry, etc.

Don’t set and forget. Insurance pricing changes constantly. Today’s best deal may not be best next year.

Making the Decision

Bundle your insurance if:

• ☑️ Bundle price beats best separate prices
• ☑️ The insurer is competitive for BOTH types
• ☑️ You value simplicity highly
• ☑️ You need umbrella coverage
• ☑️ Loyalty programs offer additional value

Keep policies separate if:

• ☑️ Separate total is cheaper (even after bundle discount)
• ☑️ You have specialized needs
• ☑️ Different insurers are clearly better for different coverage
• ☑️ You want to avoid putting all eggs in one basket

The Quick Comparison Worksheet

BUNDLE OPTION:
Best bundle quote: $_______
From: _______________
Discount applied: ____%

SEPARATE OPTION:
Best auto quote: $_______ from _______
Best home quote: $_______ from _______
Separate total: $_______

WINNER: _______ saves $_______/year

Annual savings invested at 7% for 10 years: $_______

The Bottom Line

Bundle discounts are marketing—not automatic savings.

The discount makes bundling SOUND better. But the only number that matters is your total annual cost. A 20% discount on inflated prices can still cost more than no discount on competitive prices.

The rule: Always compare total cost of best bundle vs total cost of best separate policies. Let the math decide, not the marketing.

For most people, the difference is $100-400/year. Worth 30 minutes of shopping to get right.

About This Calculator

Discount ranges from insurer rate filings and consumer surveys. Actual discounts vary by state, risk profile, and coverage levels. Always get actual quotes for accurate comparison. Prices change frequently—requote at each renewal. Last updated January 2025.