Insurance Bundled Discounts
Thursday, January 17, 2013
Many of us complain incessantly about high insurance premiums, but never investigate the savings that are available to us. There are in fact numerous ways to save on insurance premiums, but it requires some organized and systematic insurance practices, rather than piecemeal policy selections. If you choose an insurance company just because your parents made use of them, or because your real-estate agent proposed them, the savings might not be available to you.
The most common way in which you can save on your premiums is to insure your possessions together. Many insurance companies now offer discounted policies that bundle your belongings.
This is how it works:
If you insure your house with one company and your car with another, you pay a standardly priced premium to each company, both carry your risks and both compensate you for your losses. If you insure all your possessions with the same company, however, you pay a smaller premium to the one company and it alone provides all your insurance needs.
Two of the most common examples are these:
- Insurance companies often insure both your house and vehicle together and give you a discount on the joint policy.
- Companies insure all your vehicles together at one lower monthly premium.
If you want to know what is in it for the insurance company, it is simple:
- Since they pile up more premiums under the same roof, they have a larger budget and are able to offer them at a discount.
- Instead of signing up customers that have only one insurable possession, they manage to collect customers with several. These are often the wealthier customers who can also afford alarm systems and safe parking spaces, which minimizes the risks to their homes and their vehicles that are carried by the insurance company.
- By offering bundled insurance products, companies manage to hold onto loyal customers who stay with them for years, instead of having to struggle to find new customers every few months when their existing customers leave.
The advantages to the customers are the following:
- You pay lower monthly premiums. Researchers have found that customers can save between 10% and 30% on what they would have paid if they had insured their possessions separately.
- You pay only one premium to one company, which minimizes your bank charges and maximizes your convenience. The entire billing process is simpler, in fact, since the company sends out only one statement as well.
- You have only one renewal date to remember, and only one renewal process to complete.
- Research shows that customer satisfaction is higher with companies that provide bundled policies than with those that do not.
- Familiarity with one company’s rules and regulations streamlines your dealings with them when making claims and when altering policies.
Bundled insurance policies are advantageous to both the insurer and insured and should thus be explored by everyone with insurable interests.