How to Save Money on Your Insurance – Multiple Policy Discounts

Another cool discounts that many insurance companies offer is a multiple line or multiple policy discount. This differs from the multiple car discount in that they are rewarding you for having different types of insurance with the same company. For instance, just having your auto insured would be one price, but if you added homeowners insurance, your auto rates would go down. In SOME cases, the  discount you receive on your auto could actually pay for the cost of the additional insurance. It is rare, but it does happen.

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For instance, let’s say your auto policy is $1200 per year. If you are a renter, your renters policy might only cost you $140 per year. By adding the renters policy, your auto policy might actually go DOWN by $145 per year. VOILA! YOU just SAVED $5 by adding a renters policy!

Now, some folks might say “That is stupid, why would I care about $5?” Well…smarty pants, $5 might not be a lot, but now all of your personal property is insured….uhhh…you shouldn’t really have to explain why that makes sense, but sometimes, I still do.

The REAL question is, how can the company make money by allowing me to pay LESS for adding additional policies? Good question.

The answer? The company is betting that since you now have more than one type of insurance with them, you will stay with that company much longer. Here is an easy way to look at it. If you only had one auto insured, switching companies would not be that much of a hassle. Now, if you had an auto, a homeowners insurance policy, a life insurance policy, and a disability income policy, well, that would be a little more of a chore.

The more insurances you have with a particular company, the more likely you are to stay there. This is generally a good thing. The better your relationship with your agency, the more likely you are to be notified of potential discounts, times when your policy payment is late, hear about additional policies that may benefit you and your family and more. It pays to get to know your agency and agent. If you choose a brokerage or purchase insurance online, you are merely interested in price. Price IS important, but it is merely one factor that goes into determining what is the best value and situation for you. More on that later…

Photo credit/Flickr/ZeroOne, pfala

This entry was posted on Saturday, July 25th, 2009 at 2:17 pm and is filed under article. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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