Multi-Policy Insurance Discounts: What to Know to Save Money

If you own a car, or more than one car, and you own a home, (or more than one home, for that matter), you may be eligible for a multiple policy, aka, multi-policy discount on your insurance.  That means a savings of anywhere from 5% to 10% or more on your policies depending on your insurance carrier.  If you need different types of insurance policies, such as homeowner’s, life insurance, health insurance, disability insurance and auto insurance and you purchase them from the same insurance provider, you have a good chance of getting the auto insurance policy at a discounted rate. Insurance companies appreciate more business and one way of showing their appreciation is by offering special discounts.

Some insurance carriers that provide commercial lines (business) policies, will allow you to combine those with personal lines policies such as homeowners’ and auto for significant discounts as well. 

Do your homework

You can potentially save a fair amount of money by having all your insurance needs fulfilled by one insurance company.  However, while nearly every insurance company offers multi-policy discounts, shopping around for prices is still your best bet to finding the best deal.   Bringing all your insurance business to one company might give you a break over paying full price for each policy, but be careful because you could wind up paying more than you have to, even with the discount.  Add up all your premiums and make sure having several policies with one insurance provider is saving you money over all.  It is possible that you can save more by buying different policies from different insurers.

For example, suppose you get quotes from several companies while shopping for various policies: 

•    Aardvark Insurance offers you:

Auto Insurance: $2587
Homeowners’: $1310
Life: $2520

•    Boilerplate Insurance offers you:

Auto Insurance: $1312
Homeowners’: $2712
Life: $2124

•    Cardplay Insurance offers you:

Auto Insurance: $3330
Homeowners’: $2568
Life: $1714

Obviously, the company offering the cheapest rate for auto insurance (Boilerplate) doesn’t have the lowest rate for any other policy.  If you get all three policies from Boilerplate, they offer you a 10% discount, though.  Terrific, you say!  A multi-policy discount!  So this is how it turns out with the discount: $1312 + $2712 + $2124 = $6148 – (10% of $6148, or $614.80) = $5533.20 for all 3 policies.  Not bad, you’re thinking.  Okay, now add up the least expensive policy for each type of insurance if you were to buy them separately.  You have auto insurance from Boilerplate for $1312, homeowners’ insurance from Aardvark for $1310, and life insurance from Cardplay for $1714.  Do the math!  That totals $4336! You tell me which is the better deal.

How do you know which way to go?
Even though you would get the multi-policy discount if you bought all your policies from one, you would not save as much as you would by buying from several insurers in this situation.  Saving $1,197.20 should not be overlooked.  But how do you know which would serve you better considering that someone else with different quotes for different insurance from various companies might be served better by a multi-policy discount? 

Your best bet is to get a large number of quotes from many insurance providers for each policy.  Contrast the sum you’ll pay by buying from insurers who have the best quote for each policy with what your agent says you will get as a multi-policy discount for buying from one insurer.  Then make your well-researched, well-educated decision.