Truth Behind Insurance Bundling

It may not be far from the truth that your insurance company has been asking if you would be interested in bundling your separate insurance policies with them. It is likely that you have made wise investment choices by diversifying your insurance policies- whether they be life, home, auto, health, dental… – simply because for you, it is cheaper to do so. However, for your insurance company, they realize they are losing money by not having your business, and to this end, they want to get as much from you as they can. Insurance bundling is a term loosely designed around the majority principle, meaning the more elements of an investment (you) are present, the cheaper it is to maintain. And this is all in your agencies benefit, not in your own best interest.

Why Bundle Your Insurance

The only leverage a customer has with an insurance agency is the fact that they can take their business elsewhere. When only one policy is being effected, this is rather simple. But, there is a presumption that a bundled policy, where prices are based on a complete package rather than a single policy, the prices will skyrocket and prove to be more expensive separately. Your insurance company will tell you that you can save money by doing this, and they are banking on the fact you won’t actually take the time to do the math. The true savings you realize from your insurance is your ability to shop around.

Your insurance company will also tell you that it’s simpler for you if you have all of your policies in one place- and in actuality, this isn’t the case. Having multiple accounts with the same company under the same umbrella policy limits the benefits you can realize, including future discounts on policies. Your bundled package is locked in at current rates until you close the policy, meaning if you are unhappy with your auto insurance and want to cancel, you will also lose the health insurance policy you have with them even if you completely love it.

Stay Independent

Your best choice in this matter is to keep your various auto and home policies separate from your health and life insurance. This lets you shop around should a better rate and deal come across your desk, and simplifies your decision making options when shopping for new policies. With a little attention to detail and working out the math yourself, you will soon realize what seems to be a good deal most likely is not.

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