Actual billions of dollars have been spent by insurance carriers telling clients to “bundle and save” in some way. And the advertising has been effective! Clients consistently do ask about bundled discounts as a way to save on cost.
But what if I told you that only 50% of our clients are in a single carrier bundled package? And that by doing so, they actually have saved thousands?
First – what the hell is bundling? If you haven’t been bundle-pilled by the ads, it is simply purchasing your auto and home insurance from the same insurance carrier. In return of spreading the risk out between two different policies, the insurance carrier discounts the rates on both policies. Sounds amazing right?
Here are the 3 main reasons why not every client should bundle.
1. Homeowners Insurance contracts are not created equal.
No product has evolved more over the last 20 years in the insurance market than homeowners insurance. Carriers have added additional optional coverage packages that act nearly like a warranty for AC units and water heaters. At the same time, carriers have also started to use the term “cost-sharing,” a fancy way of saying that clients are going to pay $10,000 or more in certain types of claims.
And clients don’t read the policies. And here is the secret – most agents and brokers don’t either!
Saving 10% on your auto insurance only to find out your roof is only getting covered for $7,000 of the $15,000 cost isn’t a cost savings.
Hiring a great independent insurance broker, who has actually read the contracts, is the first step to saving the promises from the TV ads.
2. Every insurance carrier has a specialty.
We all do something uniquely better than other people. Organizations are no different. Some carriers find new and innovative ways to only write homeowners insurance with an amazing coverage package at a value price. Others somehow have figured out the math to profitability while predicting how fast moving objects will or won’t hit each other (aka cars).
A great broker knows the local market, what carriers are shining where, and how to piece the puzzle together to maximize your value.
3. Carriers who advertise the “bundle” are typically direct purchase or captive insurance companies.
Most of the advertising done by insurance carriers are in the captive or self-buy markets. Captive simply means that the insurance agent can only offer the one company, OR has a SIGNIFICANT financial incentive to put you with that singular company. Some of these carriers have minimum homeowners deductibles that are .5% of your home’s value though. Others simply aren’t price competitive or will not offer replacement cost coverage on your roof. The last group tries to convince consumers that “all insurance is the same” so you might as well do itself and purchase it online.
Our agent at D & S Insurance Group offer the best of all worlds. We offer you multiple options to choose from AND explain the difference in the contracts. We will advise when you are a good fit for 1 product or if bundling is your best option to maximize savings and value. And if having 3 different insurance companies is the right fit for you – we have a singular customer portal that you can see all those policies in 1 place.
Conclusion
Don’t fall for the ads and think bundling insurance is the only way to save. Contact a great broker team, like ours at D & S Insurance Group, and combine the simplicity of online shopping with the expertise of a local professional.
And the best part is – we are free to you. The insurance company pays us directly.
