Did you know that Canada is home to over 192 private property/casual (P/C) insurance companies? They provide insurance coverage for cars, homes, renters, condo owners, and even travelers. The majority of these businesses also sell more than one type of insurance policy.
That tight competition is one reason insurers offer discounts to potential clients. One of these is the insurance bundling discount.
With auto and home insurance rates expected to go up further this 2021, it makes sense to get that discount.
This guide will cover the most important facts you need to know about bundling insurance, so be sure to read on.
Insurance bundling is the practice of buying multiple policies from the same provider or company.
Let's say you need to purchase a new car insurance policy and a home insurance policy. In this case, you can get an insurance bundle, meaning you buy them from the same provider.
One of the chief reasons you want to bundle insurance policies is to qualify for a discounted rate. The exact discount varies from one insurer to another, but some offer up to 20% or more. Usually, the more policies you buy from a single company, the larger the discount you can qualify for.
In March 2021, Canada saw a staggering 34,828 new passenger vehicle registrations. That's a considerable increase of 13,671 registrations from the previous month. What's more, experts say this upward trend is likely to continue.
Home sales in the country also jumped in March 2021. During that month, there were 76,259 homes sold via the Canadian MLS Systems alone. As with new car sales, home sales may also continue to pick up throughout the year.
Those stats show how cars and homes are the most common properties Canadians invest in. This is also why the car and home insurance bundle is the most common bundling discount.
Do note that existing home and car owners can also qualify for home and auto insurance bundle offers. If your policies are about to expire, explore your bundling options first. Don't just renew them with the same provider, especially not if they won't give you lower rates.
As you shop for new car and home insurance policies, it's best to get quotes before you factor in the discount. For starters, the total discount you will get still depends on how much your premiums will be. A higher discount percentage won't save you more if your actual premiums will still be high.
To make things clear, let's use the average car insurance cost in Ontario, which is about $1,600. Let's also say one company offers a 20% discount on that policy if you bundle it with home insurance. That means you can save $320 on your car insurance per year, bringing your annual costs to only $1,280.
Then, you come across another insurer offering a discount of 25%. It sounds like a better deal, right? However, it may turn out to be the opposite if that company would charge you $1,800 for your auto insurance policy.
In that case, the 25% discount will save you $450, but you'll still pay $1,350 per year. That's $70 more than what you'd pay for if you bought the $1,600 policy with a 20% discount.
That's why it's imperative to shop and compare quotes first and not focus on just the discount rate.
Yes, although this depends on the actual insurance products sold by the insurer. For example, you can bundle home and life insurance or car and life insurance, so long as the insurer offers them.
You can also bundle insurance for renters, condos, motor homes, ATVs, and boats. There are even insurers offering discounts for bundling pet insurance with another policy.
Saving money is only the tip of the iceberg when it comes to insurance bundling advantages. Aside from the multi-policy discount, you also get to enjoy convenience. There's also the reduced risk of having your policies canceled.
Almost three-quarters of Canadians spend between three and four hours online each day. You might end up using even more time if you need to manage several policies from various providers. Just imagine how inconvenient it could be if you need to log in to two or more different websites.
By contrast, bundling your policies together means you only have one account to deal with. Most insurers have websites where you can view all your policies with them from one platform. You can then check your premiums, effective dates, and payment due dates via just one website.
In addition, bundled insurance policies have a single payment and due date. This helps reduce your risks of forgetting or missing payments.
Some P/C insurance companies offer single deductible payments for multiple claims. An example is if a tree falls and damages not only your home's roof but your car, too. If your car and home policies are from the same company, they may only require you to pay just one deductible.
If your policies are from different insurers, you will have to pay two deductibles.
Working with different insurers can also be a pain when you have to make multiple claims. For starters, you'd need to talk to each insurance company regarding your claim. You'd also need to deal with the insurance adjuster sent by each insurance company.
That also means you'd have to make separate schedules for each adjuster's visit. Since the adjusters work for different companies, you may have to see them on different days.
All that can be a huge inconvenience on your part, and you may even have to take a day off from work to prepare for the visit.
You can avoid all that if you have an insurance bundle, as you only need to file a claim with a single insurer. They'd likely send just one adjuster, too, so that's another load off of your mind.
In Canada, insurance companies have the right to cancel unpaid policies. They can also terminate the policy of a customer who fails to maintain their property. The same goes for policyholders who fail to notify insurers of an increase in their risks.
If you only have a single policy with one insurer, the company may find it easier to cancel your coverage. However, they may be more forgiving if you purchased several products from them. After all, the more policies you have with them, the more they also stand to lose.
Bundling is an excellent strategy to save on premiums, but it doesn't always apply to everyone. In rare cases, buying policies from different providers may make more sense.
Below are a few examples of such situations.
Classic, high-performance, and luxury cars often require a special type of auto insurance. The coverage given by typical vehicle insurance policies may not be enough for such cars. In this case, you may lose a good chunk of coverage if you bundle your policies.
Insurance riders are add-ons that cover risks excluded in a standard policy. One example is personal articles insurance, which covers high-value items, such as jewelry. Not all insurers provide this specialized type of coverage.
So, before you bundle your policies, be sure the provider offers the riders you need. If not, you may still bundle your policies, but you have to purchase the rider separately. Just make sure that you will actually save if you do decide to group your coverages.
Always keep in mind that insurance rates more often increase than decrease each year. Your risks may also be higher or lower each passing year, so your insurance needs will change, too. As a result, the savings you get with your bundled policies may also rise or dip.
If you concentrate on just the discount you're getting, you may forget to shop around each year. This can result in missed opportunities for better coverage and greater savings. That's why it's crucial to set aside a day or two each year to review your policies.
As you can see, insurance bundling is one of the best and easiest ways to save on insurance costs. It also makes managing your coverages simpler and more convenient. Plus, it can help you minimize the headaches associated with claims and cancellations.
All that should be enough reason to consider bundling two or more insurance policies.
If you're ready to explore bundling offers, our team here at Insurdinary can help you get started! Let us know what policies you need, and we'll send you the best offers and quotes from Canada's top insurers!