Does Combining Home and Auto Insurance Save Money?

Many home and auto insurance companies offer one policy with coverage for both the home and the car. This idea became seriously popular and the trend caught on quickly. During the process of many quotes for home and auto insurance, the agent or the online program will quote a figure regarding how much money you are saving by combining both your home and auto insurance policies. They are, of course, only quoting the money that you are saving through their company. Should you choose to carry half of your home and auto insurance policy elsewhere, you may very well get a lower rate.

So, does combining your home and auto insurance policies save you money? For the most part, the answer is yes. Many insurance companies offer significant discounts for keeping both policies with one company and using a combined program. There is little likelihood that you will file a claim against both your home and your car in the same year. Thus, by keeping both a home and auto insurance policy with the same company, statistically speaking the company can expect to make money even after a claim is filed because they are charging for property which is not part of the claim. This ratio of expected earnings combined with the statistical likelihood of never having to file a dual claim allows the insurance company to lower their rates. However, this is assuming that you are carrying a significant auto insurance policy.

For those who carry discount car insurance policies that offer only liability, there is a chance that combining your home and auto insurance policy will actually cost you more. The figures are based on the assumption that you are making payments on your car and have the additions of collision and personal injury on the policy. Those who carry only liability are more likely to save with a separate home and auto insurance company.

On the flip side of the coin, it is not recommended for homeowners to carry discount car insurance that only offer liability. In the event of a significant accident that you can be proven at fault, you run the risk of losing everything, including your home, in the event of a lawsuit.

Many policies that offer both home and auto insurance coverage can be quite in depth, cover both areas well, and do all this for a reasonable rate. However, there are some companies that offer both home and auto insurance on the same policy that cut a few corners while cutting the cost to the consumer. When purchasing a dual policy, take a few minutes of your time to make sure that all the I's are dotted and the T's are crossed and that you are getting maximum coverage for you dollar. There is no point in trying to save some money and make life just that much more convenient by placing your home and auto insurance on the same policy if you end up with subpar coverage.