Bundling Renters and Auto Insurance: 4 Things to Know

If your insurance company offers this particular discount, bundling renters and auto insurance together is a way to potentially save some money as opposed to buying these two coverages separately. This bundling option is offered by most insurers that sell both auto and renters insurance because it increases their business.

It not only saves you some premium dollars but also helps make your insurance portfolio easier to deal with since you can transact business with a single agent and have contact with your insurer through one single contact point when you need to make a claim. Multiple policies carried with one provider also simplifies paperwork/billing, saving time and money for you and your insurer.

You may save additional funds by adding more policies to your bundling renters and auto insurance strategy. Motorcycle insurance, boat insurance and even life insurance can be added to the discount scenario to bring you even more savings.

Bundling Usually Saves Money

Insurers that offer a discount for bundling multiple policies typically give from 5%-25%, with the highest discount commonly for a homeowners insurance policy since, your home represents such a large investment. Renters insurance won't provide as large a discount, but every little bit helps. If your insurance company can get you to add multiple policies to your coverage that's one less client they need to bring in to make their customer quotas.

One caution about bundling policies, however, is to make sure you don't become complacent about your coverages and adopt a “set it and forget it” mentality. You should continue to compare rates with competitor insurers to make sure you're still getting acceptable rates. Just because you have a multiple policy discount from one insurer doesn't mean you shouldn't consider switching companies if you can get a better deal elsewhere.

A Word About Renters Insurance

The number of renters is on the rise, with renters now outnumbering homeowners in a number of American cities. While it's estimated that approximately 91% of American homeowners carry homeowners insurance, only about 46% of renters carry renters insurance. This is according to the 2018 Pulse Survey conducted by the Insurance Information Institute.

Like homeowners coverage, renters insurance provides protection against loss, damage or destruction of the the personal property you have in your residence. It also gives you liability protection and provides living expenses should you be required to temporarily vacate your dwelling following an insured disaster. Yet, renters insurance is relatively inexpensive, costing an average of less than $200 per year.

What Can I Do to Lower My Homeowners Insurance Premiums?

If you're like most homeowners, your home and personal possessions represent your largest investment. You need to protect that investment, which is why you're willing to pay homeowners insurance premiums to an insurance company who will extend that financial protection to you for a price.

If you have a mortgage on your property, the mortgage company requires that you take out insurance coverage to protect their financial investment in your home. If your home is destroyed, they want to know they'll be paid back for the amount outstanding on your mortgage loan.

A Major Problem 

According to a recent survey by research firm Marshall & Swift, fewer than half the homes in the U.S. are covered by enough insurance to rebuild them after a major disaster occurs. They go on to say that approximately 60% of American homes are worth more than their insurance reflects (by 17%). This is an improvement, however, from 30 years ago when, according to the Insurance Information Institute, 73% of homes were underinsured by an average of 35%.

There's no doubt that a certain number of these homes are being underinsured for the purpose of lowering the homeowners insurance premiums. Another explanation is that many homeowners only carry as much homeowners insurance as is required by their mortgage lender, equal or greater than the current amount owing on their mortgage loans.

If you fall into this category, there's a good chance that your home is underinsured. The cost difference between the amount owed on your loan and the amount that would be required to rebuild your home, including construction materials and labor, is likely significant.

Saving on Premiums

Underinsuring your home in order to save on premium dollars is only smart if you know for a fact that you'll never need to make a major claim on your policy. And, of course, you couldn't know this absolutely. As the old saying goes regarding insurance: “It's better to have it and not need it than to need it and not have it!”

There are, however, other ways to lower your homeowners insurance premiums that are safe and make good sense. Consider these:

• Shop around for the best deal. Use a broker with multiple companies from which to choose
• Bundle your home, life and auto policies with the same company
• Explore every discount available
• Choose a higher deductible
• Improve your home's disaster resistance
• Add home security features

How Much Will Adding a Teen Driver Increase My Auto Insurance Rate?

If you're not prepared in advance for the auto insurance rate amounts currently being charged by insurance companies for new teen drivers, you may well be shell-shocked when it comes time for your teen driver to insure his or her vehicle. Teens are some of the most expensive drivers to insure because of the large risk they typically pose to auto insurance companies. Statistically, teen drivers are most likely to be involved in accidents, to cause accidents and to drive in such a way as to get ticketed for moving violations.

According to the Center for Disease Control and Prevention, drivers between the ages of 15 and 19 are four times more likely to be involved in an automobile crash than older drivers. This makes vehicle crashes the number one cause of death among individuals within this age group.
The riskiest age for car crashes is 16. Their crash rate is double that of 18 and 19-year-old teens. With risk being a major determining factor in setting auto insurance rate amounts, it's no wonder teen drivers are faced with paying the highest of those rates.

Individual Policy Rates Versus Adding Your Teen to Your Policy

There are numerous ways to lower costs when insuring teen drivers. The first is to add him/her to your policy rather than having them take out an individual policy of their own. The cost difference between these two options is significant. Taking into account all teen drivers between the ages of 15 and 19, and factoring cost differences between a wide variety of different insurers, the average cost of an individual teen driver's insurance policy for a modestly priced vehicle is about $3,000 annually.

This rate includes liability protection of $100K per person per accident (bodily injury), $300K total bodily injury per accident and $100K property damage per accident. Comprehensive and collision protection aren't included in this estimate.

Compare that cost with an average increase of $620 when adding your teen to your auto insurance policy.

Other Ways to Save

Most auto insurers offer numerous discounts when taking out or adding your teen to a policy, however, be advised they aren't likely to be forthcoming with all the discounts they have available. In other words, you have to ask about each and every discount for which you may qualify. These can quickly add up to significant savings. Check out this blog post.