August 17, 2016
There are dozens and dozens of discounts out there in the world of Insurance. Some of them are odd and some of them are obvious. Of all the discounts the one that is most mentioned by insurance agents and insurance commercials, is the so called Home Auto Discount. At least in my opinion. You can almost hear the questions in the air? Why didn’t you get the home auto discount? Why would you not get your auto insurance with your home insurance? Professionally, I think the discount can be terrific. However, beware of any oversimplified opinions. Not everyone knows your situation.
The discount is typically applied with both the home insurance and auto insurance are purchased from the same group of insurance companies. Technically this does not necessarily mean the same insurance company. Without going into the weeds about Insurance governance and corporate structure, often insurance companies will create different standalone corporations that may be created either by state, insurance type (Home, Business, Auto, Etc), or both. The home insurance can usually be a condo or single family dwelling. Some companies apply a similar or lower discount for a Renters Policy as well. Curiously, I have seen situations where the discount for the auto policy more than pays for the renters insurance policy.
Not to confuse you, but there can also be additional discounts stacked on top of the Auto Home discount. The most popular is the Umbrella discount. If you purchase your home and auto and umbrella policy from the same company you may be able to get another savings added on. This triple play discount often is a great option.
The other less popular discount is the Auto – Home – Life insurance discount. If you were to have your home your auto and your life insurance from the same company than another discount be applied. In general I caution my readers to be very careful with this. As you may be aware I am a proponent for most people of Level Term Life Insurance. The market for level term is highly competitive. In my opinion, the home and auto insurers are just not all that competitive with the likes of Banner, Ohio National, etc. Check out my term life insurance rater to get an idea.
“In general I caution my readers” to be careful pairing their life insurance with their auto and home…
Simple, just get both insurances from the same company. Before you sign up, inquire with the agent. You may not have to ask about it as the agent may quickly tell you all about it. Confirm when you see finalized policies.
It may not be needed, but it can be helpful. Who would not want an extra 5% off of their total auto and home insurance bill? That being said just because you get an additional discount, does not mean that getting your home and auto from the same place is the best deal
The Auto Home insurance can certainly assist consumers in lowering their overall insurance bill.
In many situations it may be advantageous to purchase your home and your auto insurance from different insurance companies. This of course would not get you the Home Auto Discount. There are dozens of reasons that I can think of. I am sure that there are many more. Here are a couple of more common situations:
It may be the case that for whatever reason, age, driving record, claims that you are considered a high risk driver. If this is the case, perhaps State Farm or Safeco will not take you. Therefore you may be left with choosing Auto Insurance from a sub standard carrier. Nothing against these carriers but you may not feel comfortable having them write your home as well. Perhaps they do not even write home insurance in California.
Your San Francisco home may be considered a high risk home to insure. Perhaps its close to wild lands or built on top of an earthquake fault. The home insurer that you choose may therefore not even write auto insurance. Or perhaps you do not particularly like them enough to do both.
The credit rating of one of your home or auto insurer may not be that high. Therefore you choose to purchase, say auto insurance from an A+ rated carrier instead. Consumers probably do not consider the credit rating as much as they should.
The most obvious reason, is the least often considered, I find. Sometimes the Auto and Home discount is just not enough to overcome the increased rates from either the homeowners or vehicle insurance. Sometimes the package is just not a good deal. In this situation splitting up the policy may be in your best interest. This happens often with my clients. To be clear it can be an increased work load on your insurance agent.
When purchasing these separately you can either purchase them from two different insurance agents or both from an independent agent or broker. There can be benefits to doing it either way. Some insurance companies will only work Captive Insurance Agents, while Independent Insurance Agents will work with the open Insurance Companies. As well, Captive Insurance Companies will not work with Independent Agents and Open Insurance Companies cannot work with Captive agents. For more information on this read Captive Vs Independent.
Therefore, you may just want to shop both of the policies at the same time with an independent insurance broker. Or you may just want to peel away one of the two and have someone new look at it. There really is a myriad of options. Remember, generally speaking, it pays to shop around perhaps every three years. Try new agents, Call up a new broker. The so called proof is in the pudding.
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