Bundling is growing increasingly popular these days. Businesses are starting to offer a whole plethora of different services with the promise of saving you money should you take out more than one product with the same company. Of course, the insurance industry is no exception; but does it really pay to keep all your eggs in one basket?
When you purchase insurance the information you provide is used to calculate your premium. This premium provides insurance that is far in excess of the amount you are asked to pay, but high enough to keep the insurer profitable. If you take out all of your insurance policies with just one provider they are generally more willing to make less profit on your premiums in return for receiving a greater amount from you in premiums throughout the year.
There are both advantages and disadvantages to taking out more than one policy with your existing insurer. Many consumers find that they get a better deal if they purchase all of their insurance policies with the same provider, although it seems that this varies across the board, so it pays to check whether you could save money by shopping elsewhere rather than presuming that a bundled deal is automatically cheaper. Make sure that you do plenty of research before you take out a policy as if you don’t make a saving there is no logical reason to bundle.
Some insurance providers may offer you a discount if you bundle your policies, although they may also require you to include add-ons in order to recover their costs. Depending on what type of policy you take out, add-ons can include extra cover for breakdown assistance, additional cover for jewellery and valuables, or lost key cover. These types of add-ons can be beneficial, but make sure that you really need them before you add them to your policy in an effort to get a better deal. If you are offered a cost saving by bundling your policies then check first to ensure that there are no additional purchases required.
A deductible, or excess, is the amount of money that you must contribute out of your own pocket should you make a claim. Some insurers who offer bundled policies allow you to pay one deductible for the same event even if you need to claim on two separate policies. For example, if you were burgled and the thieves also took your car then you would only be required to pay the highest deductible. This does represent a cost saving in some circumstances, but not all. It is highly unlikely that you would need to make a claim on both your pet insurance, and your contents insurance at the same time, and due to the same circumstances, so weigh up whether this bonus is likely to be of benefit.
One of the main drawbacks of bundling your insurance policies is the temptation not to shop around for a better deal when your policy is due for renewal. It can be tempting to presume that you are already getting the best possible deal if you already bundle your policies, but this isn’t necessarily the case. When your renewal date approaches then search online, or contact an insurance broker to see if your current deal is still economical. The insurance industry is very competitive and different companies will offer different deals throughout the year.
A disadvantage of bundling together all your insurance products is that you run a slight risk of your insurance company running into financial difficulty. You may wish to spread your investments over several companies rather than stick to one just in case your insurance provider of choice goes under. In addition, by choosing to combine your policies with just one provider you might miss out on other insurance products, such as add-ons that would have been beneficial to you.
As a general rule of thumb, bundling your insurance policies together can save you money. However, bear in mind that not all companies offer the same products. You may find that most companies will offer bundling deals on car insurance, home insurance and life insurance, but whether you can bundle all of the policies you require with one insurer depends very much on which products they offer.
Bundling together your insurance policies may very well save you money in the short term, but remember that insurers realise that if you bundle all your policies with them then you are more likely to remain a long-term customer, and not shop around for a better deal on a regular basis. This results in you sometimes missing out on better deals elsewhere.
In order to make sure that you receive the most competitive quote when you are next in the market for insurance you need to conduct a considerable amount of research. Rather than stick to the same insurer, year upon year, and to save time, you may wish to consult with an experienced insurance broker who is often able to get you the best deals, and who will do all the legwork for you. The best deal may very well be a bundled deal, but make sure that you continue to compare your current premium with those offered by other insurers when your policy is up for renewal.