Bundling insurance is a common way to save money. Many homeowners choose to bundle their homeowner’s insurance with auto insurance so they can have their policies all in one place. But is it really cheaper to bundle auto and home insurance?

In general, it may be cheaper to bundle your home and auto insurance, as your insurance company may give you a deal if you purchase both from them. Then again, having a bundle discourages you from switching insurances for cheaper rates. If your rates keep going up, you could end up overpaying for auto insurance.

In general, the discount will be higher for the higher cost. A home typically costs more to insure, but this may not be true depending on the car or cars you own and your driving record. If you have a relatively good driving record and a cheap car, bundling home and auto may save you money on your home insurance but not necessarily on your auto insurance.

Benefits for Bundling Auto Insurance with Home Insurance

• Decreased likelihood that you’ll be dropped: Insurance companies may threaten to drop you if you have a lot of claims on your vehicle. If you bundle with your insurance company, however, they may be less likely to drop you since you’ve invested in two sections of their insurance.

• Discount: You may save 5%-25% on your premium payments.

• Consolidated policies: A lot of insurance companies offer their bundlers an app or portal where they can view all their insurance policies in one convenient place.

• One agent: You will typically have only one agent for both policies, which cuts out having to deal with multiple agents.

Disadvantages of Bundling Auto Insurance with Home Insurance

• No price shopping: Having a bundle may prevent you from seeing the other discounts that are available elsewhere.

• Affiliate bundling: Some insurance companies don’t actually bundle your home and auto, but instead send your auto insurance to an affiliate company. This means you may not have the perk of having everything in one place.

• Rising premiums: Insurance companies may push up your premiums over time when you bundle with them. Although you began with a discount, you could end up paying too much.

Consider your options and shop around before choosing to bundle your home and auto insurance. For some it may be a no-brainer while others may want to consider having separate policies for their individual needs.