Should You Bundle Home And Auto Insurance?

Key Points:

• Bundling your home and auto insurance can save you money and time, and lower your risk of being dropped by your insurer.
• Bundling your insurance isn’t always the cheapest option, and you need to watch for premiums that creep up over time. 
• If you’re looking to bundle your home and auto insurance, we suggest starting your research with State Farm, USAA, and Geico.

Most insurance companies will offer consumers a discount if you bundle your home and auto insurance together. But does it really save you money in the long run? In this article, we’ll take a closer look at the pros and cons of bundling your home and auto insurance, as well as the discounts you could receive from our top three providers.

Our team has spent hundreds hours researching and collecting data from dozens of insurance companies in order to rank the providers on their reliability, availability, coverage, cost, service, and technology. Keep reading to learn more about bunding your home and auto insurance with the best car insurance companies on the market.

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Why Do Providers Offer Home And Auto Insurance Bundles?

You may wonder why companies offer the option to bundle auto and home insurance coverage. While bundling these types of coverage can save you money on insurance costs, it can also help maintain revenue for your provider. People who bundle their auto and home insurance policies may be compelled to stay with their provider longer due to available discounts and convenience. This helps insurance companies retain customers.

Insurance providers also save money when you bundle. Insurance companies hire people to research each new client to determine how much risk the customer presents. This process, called underwriting, includes looking into a customer’s credit score, driving record, employment history, and other factors. Since insurance companies complete underwriting for each new customer, they save money when they only have to complete this process once for multiple policies.

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Pros Of Bundling Home And Auto Insurance

Take a closer look below at some benefits to consider when deciding if you should bundle your home and auto insurance: 

Cost Effective

If you bundle your auto and home policies, you’re likely to save money on insurance premiums. Most car insurance companies offer a variety of discounts, and you’ll be able to take advantage of the multi-policy discount if you choose to bundle.

Your exact discount will vary between insurance companies, but many offer a discount of at least 10 percent. In addition, some companies lower deductibles when you bundle, while others allow customers to combine deductibles in certain claims circumstances. For example, if a tree in your yard falls on your car in a windstorm, you may be able to lump all damages into one claim.

Saves You Time

Dealing with one provider for all your needs can save you time and hassle. If you choose an auto and home insurance company that works through local agents, you’ll only need to deal with one agent for everything when you bundle your policies. 

In addition, when you bundle home and auto insurance policies, you only need to download and learn one provider’s mobile app. This also allows you to quickly check both policies and pay premiums from the same place.

Lowers Your Drop Risk

Insurance companies closely monitor your driving record and insurance claims to determine your financial risk. If you file too many claims or end up in multiple accidents, some insurance companies will drop you. However, when you bundle your car and homeowners insurance policies, you become more valuable to an insurance company. Although you shouldn’t entirely rely on bundling to retain coverage, having additional coverage could make an insurer less likely to drop you, depending on your circumstances.

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Cons Of Bundling Home And Auto Insurance

Although the bundling discount can be appealing, there can be some drawbacks to combining your insurance policies. Take a look at the cons of bundling a homeowners policy and auto insurance below:

Not Always Cheaper

Most insurance companies offer customers discounts when they bundle car and home insurance, but you may not receive the best rates this way. Since some providers primarily focus on car insurance, they may not offer competitive homeowners insurance rates. Personal factors, like your driving record or home location, can also lead to higher rates. We recommend getting multiple quotes to help you decide which provider offers the best homeowners insurance and auto coverage for your needs.

Premium Increases Over Time

When customers bundle car and home insurance, they may remain loyal to their provider for longer durations of time. Discounts and the convenience of dealing with one auto and homeowners insurance company can make it easy to stay put. 

However, many customers who bundle renew their policies without comparing prices first. Insurance companies know this, and may increase premiums over time because they feel confident they’ll keep your business. If you decide to bundle your home and auto insurance, collect quotes any time your rate increases.

Third-Party Vendors

When purchasing a home and auto insurance bundle, most people assume that both policies will be handled by their chosen provider. However, some providers work with affiliate insurance companies to offer multi-policy plans, so you may not have your home and auto insurance under one roof.

Make sure to research who’ll handling your policies if you choose to bundle with a certain provider.

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Factors To Consider When Bundling Home And Auto Insurance

Many factors impact insurance rates, and the cheapest insurance isn’t always the best. It’s important to consider the following when obtaining home and auto insurance quotes:

• Home and car values: The value of these items can impact rates, discounts, and coverage needs.
• Location: Your physical location can affect both your car and home insurance rates. Some insurance companies will charge more in certain geographic regions.
• Coverage needs: Sometimes bundling discounts only apply to certain policies, and you could end up paying more for your policies while receiving less coverage. 
• Cancellation or transfer fees: Some companies may charge fees for early termination or policy transfers, so read the fine print before making a switch to bundle your home and car insurance.

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Top Home And Auto Insurance Companies

As we compile ratings for auto insurers, we look at each provider’s strengths and weaknesses in six key categories: reliability, availability, coverage, cost, service, and technology.  While our ratings are strictly based on a provider’s auto insurance offerings, we’ve done additional research on home and auto bundling discounts from the industry’s top providers nationwide. We put in the research so you can make an informed decision on whether bunding your insurance is right for you.

Click here to learn more about our methodology.

Average Costs and Coverage

The national average rate for a full-coverage auto insurance policy is $1,968 per year or $164 per month. This estimate is based on a 30-year-old, single male driver with good credit and a clean driving record who owns a 2020 Honda CR-V. We’ll use this same driver profile for average provider costs later in the article.

Find more information below on our top three auto insurance providers and their costs, overall ratings, and the home and auto insurance discount they offer, so you can choose the best home and auto insurance bundle for your needs.

Each of the recommended providers below offers at least these six standard coverages options:

• Comprehensive insurance: This pays for damages to your vehicle due to theft, weather, collision with an animal, or other causes.
• Collision insurance: This pays for damages to your vehicle after an accident or collision, whether you’re at fault or not.
• Bodily injury (BI) and property damage (PD) liability car insurance: For accidents you cause, BI insurance pays for medical expenses for injured persons, and PD coverage pays for damage to other vehicles and property. 
• Medical payments coverage (MedPay): This pays for medical expenses if you’re injured in an accident.
• Underinsured/uninsured motorist coverage: This pays for damages to your vehicle and medical expenses after an accident with an uninsured or underinsured driver.
• Personal injury protection (PIP insurance): This pays for your medical expenses and other costs related to personal injury after an accident, like lost wages.

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State Farm: Best Overall

State Farm is a national leader for auto and home insurance needs. In fact, it was the largest insurance provider in the country according to the National Association of Insurance Commissioners (NAIC) in 2022. The company’s reputation speaks for itself: State Farm has an A++ (Superior) financial strength rating from AM Best and a combination of online tools and local insurance agents that make for a positive customer experience.

State Farm Quick Facts

Founded: 1922
Availability: 50 states, but no longer sells new policies in MA or RI
Market share: 16.84% in 2022
AM Best financial strength rating: A++
BBB rating: C-
Bundle discount: Varies

How We Rated State Farm Auto Insurance

See below for our ratings out of a 5.0-point scale across six categories for State Farm auto insurance:

State Farm Home And Auto Insurance: Coverage And Costs

In addition to the standard car insurance coverages, State Farm offers add-on coverage like car rental, travel expense, emergency road service, and rideshare coverage. The national average cost for full-coverage auto insurance with State Farm is $1,680 per year or $140 per month. 

If you’re looking to bundle your home and auto insurance with State Farm, it offers coverage that can protect your home, garden, keepsakes, and more. State Farm claims that its policyholders who bundle their insurance save an average of $1,127 per year. However, your own discount will vary. If you rent instead of own your home, you can also bundle auto and renters insurance with State Farm.

In August 2022, our team surveyed nearly 7,000 drivers to gauge their overall satisfaction with their auto insurers. There were 1,334 State Farm policyholders in this survey, and 84 percent of these respondents said they were either happy or very happy with their coverage.

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USAA: Best For Military

If you’re eligible for car insurance through USAA, the company’s low auto insurance rates and savings of up to 10% make it a great choice for bundling home and auto insurance. USAA has a strong AM Best financial strength rating and is available in all 50 states. However, its home and auto insurance policies are only available to military members, veterans, and their families.

USAA Quick Facts

Founded: 1922
Availability: 50 states
Market share: 5.92% in 2022
AM Best financial strength rating: A++
BBB rating: Not rated
Bundle discount: Up to 10%

How We Rated USAA Auto Insurance

See below for our ratings across six categories for USAA auto insurance:

USAA Home And Auto Insurance: Coverage And Costs

USAA offers the usual standard car insurance options to consumers, in addition to specialty coverages such as accident forgiveness, rideshare insurance, and classic car insurance. The national average cost of a full-coverage auto insurance policy with USAA is $1,476 per year or $123 per month. If you’d like to learn more about USAA’s car insurance coverage, check out our USAA auto insurance review.

USAA’s home insurance includes replacement cost coverage for personal belongings, personal liability coverage, earthquakes, home sharing, loss-of-use, dwelling coverage, and other coverage options. USAA also allows you to bundle other types of insurance, like auto and life insurance.

There were 388 USAA customers in our August 2022 survey. About 86 percent reported being happy or very happy with their auto coverage.

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Geico: Best Discount Availability

As one of the largest car insurance providers in the nation, Geico is highly rated by industry experts. It has an A+ rating from the Better Business Bureau (BBB) and an A++ rating in financial strength from AM Best. In addition, Geico ranked well in multiple regions across the United States for customer satisfaction in J.D. Power’s 2023 U.S. Auto Insurance Study℠.

Geico Quick Facts

Founded: 1939
Availability: 50 states
Market share: 13.8% in 2022
AM Best financial strength rating: A++
BBB rating: A+
Bundle discount: Varies

How We Rated Geico Auto Insurance

See below for our ratings across six categories for Geico auto insurance:

Geico Home And Auto Insurance: Coverage And Costs

Geico offers the standard car insurance options, as well as roadside assistance, rental reimbursement, and mechanical breakdown insurance. It offers several discounts and may be an affordable provider for high-risk drivers. The national average cost of a full-coverage auto policy with Geico is $1,572 per year or $131 per month. 

Home insurance products offered by Geico include property damage, flood insurance, personal property, personal liability, medical bills, and living expenses coverage. Your home and auto insurance bundle discount with this provider will vary based on different factors, but you’ll likely secure a better discount if you’re already a customer.

Of the 1,111 Geico auto policyholders in our August 2022 survey, about 81 percent said they were happy or very happy with their coverage.

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How Do I Bundle Home And Auto Insurance?

Bundling your car and home insurance is a relatively simple process. Once you compare quotes from multiple insurance companies, contact the company of your choice to start the application process. An agent will typically ask if you’d like to bundle home and auto insurance. If they don’t, mention this early in the process.

If you’re switching insurance companies, be sure to research your state’s car insurance laws and ask your new insurance company when you should cancel old policies. In addition, ask about any cancellation or transfer fees if you’re ending your previous insurance policy early.

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Home And Auto Insurance: Our Take

Given the discounts, convenience, and lower drop risk, combining home and auto insurance makes sense for many people. However, there are some cases when it isn’t in a customer’s best interest or isn’t the cheapest car insurance option. Always shop around and research companies carefully before making the decision to bundle your home and car insurance.

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Home and Auto Insurance Bundling: FAQ

Below are some frequently asked questions about bundling home and auto insurance:

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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