Bundling home and auto insurance: 5 states you can save the most, least

Bundling home and auto insurance

If you’re worried about the added cost of a new homeowners’ policy or the insurance price tag on that brand-new car you just drove off the lot, you can save yourself some money by bundling your insurance policies.

Also called a multipolicy discount, bundling is a simple process of insuring your home and vehicle with the same company. The savings can be substantial, but they can also vary from state to state.

We asked Quadrant Information Services to examine the average economic impact of bundling auto insurance with either homeowners, condo or renters insurance. Here’s a closer look at the findings.

Why does bundling home and car insurance save you money?

The bottom line is that many insurance companies offer bundling discounts for one reason — it saves the company money in the long run.

"An insurance company knows that the more business they write, the better,” says Mark Carrasquillo, an insurance agent with New York City-based E.G. Bowman Co. “The bundling discount is a sales tool to entice the consumer.”

What’s more, says Carrasquillo, "a customer who bundles two products is almost certainly more likely to buy a third. It's a beneficial business model."

Discounts for bundling home and car insurance

The most significant discount comes from bundling an auto policy with a homeowners policy. Quadrant Information Services data shows the national average premium discount for bundling is 16 percent.

See also: What 6 home insurance discounts will save you

"If you own a home, you're probably more financially stable, which means that you are statistically less likely to file a claim," says Troy Thompson, owner of Minnesota-based Pinnacle Insurance Agency. "The insurer wants your business, and it allows the company to offer a more significant discount."

Nonetheless, this discount varies from state to state. Here are the top five states with the greatest average premium discount for bundling auto and homeowners insurance.

1. Georgia — 22 percent discount.

2. Oklahoma — 22 percent discount.

3. Kansas — 22 percent discount.

4. Arkansas — 22 percent discount.

5. Nebraska — 21 percent discount.

Meanwhile, the following five states, on average, showed the smallest percentage premium discount for bundling.

1. Florida —  8 percent discount.

2. New York —  11 percent discount.

3. Hawaii —  11 percent discount.

4. West Virginia —  11 percent discount.

5. New Jersey —  12 percent discount.

Discounts for bundling condo and car insurance

Insuring a condo is different from insuring a home.

Condo owners are usually only responsible for insuring everything within the four walls of the unit (not the structure itself). This means condo insurance typically costs much less than a homeowners policy, and therefore a bundling discount isn't as substantial.

According to the study, the national average premium savings for bundling auto and condo insurance is 11 percent.

The following five states show the greatest average premium discount for bundling.

1. Illinois — 16 percent discount.

2. Wisconsin — 15 percent discount

3. Missouri — 15 percent discount.

4. Indiana — 14 percent discount.

5. South Dakota — 14 percent discount.

Meanwhile, these five states, on average, showed the smallest percentage premium discount for bundling.

1. Virginia — 7 percent discount.

2. Rhode Island — 7 percent discount.

3. Florida — 7 percent discount.

4. New York — 8 percent discount.

5. Connecticut — 8 percent discount.

Discounts for bundling renters and car insurance

Renters insurance is cheap, and that’s because the policy only covers personal possessions, liability and additional living expenses if a tenant suddenly has to relocate. Renters insurance costs less than condo insurance, and that means the bundling discount will be the least significant of the possible combinations.

See also: Do's and don'ts of shopping for renters insurance online

According to the data, the national average premium discount for bundling auto and renters insurance is just 8 percent.

The following five states show the greatest average premium discount for bundling auto and renters insurance.

1. Minnesota — 13 percent discount.

2. Indiana — 12 percent discount.

3. Wisconsin — 11 percent discount.

4. Iowa — 10 percent discount.

5. Missouri — 10 percent discount.

Meanwhile, these five locations, on average, showed the smallest percentage premium discount for bundling auto and renters insurance.

1. New Jersey — 5 percent discount.

2. Virginia — 6 percent discount.

3. New York — 6 percent discount.

4. Washington, D.C. 6 percent discount.

5.  Oregon — 6 percent discount.

How to save money bundling your insurance

Here are three tips on how to save money by bundling various coverages.

1. Pay attention to policy details. Make sure you find the best policy for your circumstances, which means looking at more than just the bundling discount. Getting the best coverage should be your top priority.

2.  Consider the net price. Most of the time, bundling insurance is a smart choice for consumers. However, there are exceptions when purchasing policies from different carriers who may be less expensive in total. Shop for insurance both ways before making a decision.

3. Shop different companies. Don't just go with the first company offering a bundling discount. Get several quotes and compare.

See also: Unexpected ways to save money on car insurance