What Is Insurance Bundling?
Insurance bundling — also called a multi-policy discount — means purchasing two or more types of insurance from the same company. The most common bundle is home and auto insurance, but you can bundle nearly any combination: renters and auto, home and life, auto and umbrella, or even multiple policies for a small business.
Insurers love bundling because it increases customer retention. When you have three policies with one company, you are far less likely to switch than if you only have one. That loyalty has real value to them, and they are willing to pass some of it back to you in the form of lower premiums.
How Much Can You Actually Save?
Savings vary by insurer, location, and the specific policies bundled, but here are typical ranges:
- Home + Auto — 5% to 25% off one or both policies. A household paying $1,500/year for auto and $1,200/year for homeowner's could save $200 to $675 annually.
- Renter's + Auto — 5% to 15% off. Since renter's insurance is already inexpensive (averaging $15 to $30/month), the dollar savings are modest but the percentage discount is often applied to the larger auto policy.
- Home + Auto + Umbrella — 10% to 25% off, plus umbrella policies themselves are surprisingly affordable ($200 to $400/year for $1 million in coverage when bundled).
- Home + Life — 5% to 10% off. Less commonly bundled, but some insurers offer meaningful discounts.
- Business + Commercial Auto — 10% to 20% off. For small business owners, bundling commercial policies into a Business Owner's Policy (BOP) can produce significant savings.
Beyond Premium Savings: Other Benefits of Bundling
Simplified Management
One login, one payment portal, one customer service number, one renewal date (or at least one company to deal with). Managing insurance across multiple carriers means tracking multiple payment dates, login credentials, and policy documents. Bundling consolidates everything.
Single Deductible for Related Claims
Some bundled policies offer a diminishing deductible or single deductible benefit. For example, if a storm damages both your home and your car, you might only pay one deductible instead of two separate ones. On a major weather event, this alone could save you $500 to $1,500.
Loyalty Perks
Bundled customers often qualify for additional perks: accident forgiveness, claims-free discounts that grow over time, and priority claims handling. Some insurers also offer a dedicated agent for bundled customers rather than routing you through a general call center.
The Downsides of Bundling
When One Policy Is Overpriced
Company A might offer the best auto insurance rate in your area but mediocre homeowner's rates. Bundling with Company A saves you 15% on both policies, but their homeowner's rate is $400 more than Company B's standalone rate. In this case, the bundle discount does not overcome the higher base price — and buying each policy from the cheapest individual provider saves more money overall.
When You Sacrifice Coverage Quality
Not every insurer excels at every type of insurance. A company known for excellent auto coverage might have subpar homeowner's claims handling. Bundling for the discount alone is not worth it if the quality of one policy suffers.
When It Creates a Single Point of Failure
If your insurer drops you — perhaps after a large claim or because they exit your state's market — you lose all your coverage at once. With separate carriers, a problem with one policy does not affect the others.
How to Bundle: A Step-by-Step Approach
- List all the policies you need — Auto, home/renters, life, umbrella, and any specialty coverage.
- Get standalone quotes first — Before asking about bundle discounts, get the best standalone rate for each policy type from three to five carriers. This gives you a baseline to compare against.
- Request bundled quotes — Ask the top three carriers what they would charge if you bundled all (or several) of your policies together.
- Do the math — Compare the total annual cost of the bundled package against the total cost of buying each policy separately from the cheapest individual providers. The lower total wins.
- Factor in non-price benefits — If the bundled total is within $100 to $200 of the split total, the convenience and additional perks of bundling may tip the scale.
Real-World Example
Consider a household with both a car and a home to insure:
- Cheapest standalone auto: $1,300/year (Company A)
- Cheapest standalone home: $1,100/year (Company B)
- Standalone total: $2,400/year
Now the bundled option:
- Company C auto: $1,450/year
- Company C home: $1,200/year
- Bundle discount (15%): -$397
- Bundled total: $2,253/year
In this scenario, bundling with Company C saves $147 per year compared to buying the cheapest standalone policies separately — plus you get the convenience benefits. That is a clear win for bundling.
But if Company C's bundled total came to $2,500, the standalone split at $2,400 would be the better deal despite requiring two separate carriers.
The Bottom Line
Bundling is one of the simplest money-saving strategies in insurance, and it works for most households. But it is not automatic — you need to run the numbers. Get standalone quotes, get bundled quotes, compare the totals, and let the math decide. In most cases, bundling will win. When it does not, you will be glad you checked.