Everyone loves finding ways to save money and to make their lives just that little bit easier. When it comes to insurance, bundling your policies with one company may seem like an easy timesaving move. They’ll even give you a discount (multi-policy discount) for doing so! Before deciding if bundling is right for you, it’s worth doing your research. Luckily, we’ve put together this guide to help you decide.
Before jumping in, let's take a look at how bundling works. When you’re filling out an online quote, most insurers will ask you if you hold any existing policies with them. They use this field to apply a multi-policy discount to your quote. It’s worth checking out the fine print to see what policies and payments this discount will apply to.
Most insurance companies are vague in their marketing as to how large this multi-policy discount is, but 10% seems to be the standard starting point. AA, State and Tower all appear to offer 10% multi-policy discounts. Tower will bump this up to 20% if you hold 3 or more policies with them. AMI doesn’t market any particular rates, but in our testing, they offer in the neighbourhood of a 5% discount for customers holding two 2 policies and 10-13% to those holding 3 or more. Note that your mileage may vary, and it is worth verifying this by obtaining different quotes.
Let's take a look at some of the reasons why you may or may not want to bundle your insurance.
The advantages
There are some strong arguments you’ll see insurance companies make as to why you should bundle all your policies with them. Probably the most attractive are multi-policy discounts. For most insurers, this is 10% off the premiums on your second policy. Some insurers such as State will give you an even larger discount (up to 20%) if you have more than 2 policies. It’s worth considering how many policies you want to bundle and what this brings the discount to.
There are other reasons you may want to bundle your insurance. Simplicity is a good reason to consider it. Only having to deal with a single company for any billing or claim related admin can save time and energy. Say you have a home and a contents policy with one company and during a burglary, your house gets damaged. That means hopefully one set of paperwork dealing with one company, compared to two if you had them with different companies. Some companies will only charge you for one excess in such cases, but it does depend on the claim you are making.
The disadvantages
Bundling seems like a smart play, who wouldn’t want to streamline their insurance policies whilst saving money? Unfortunately, it's not quite that simple. Not all insurance policies are made equal, and not all insurance companies have the same reputation across policy types.
If you’ve obtained a handful of quotes for insurance from different companies you will be well aware that premiums (cost of your insurance) vary. This is for a multitude of reasons, from different excesses, policy benefits and even the company’s reputation. Just because an insurer offers a good value policy for one category doesn’t mean they also will for other categories. This is why consumers need to be cautious about bundling.
Just because you’re getting a discount doesn’t mean you’re getting a good deal. Shopping around is crucial.
AA - Vehicle - $97.85/month, Contents - $75.63/month, Bundled - $156.52/month
AMI - Vehicle - $106.07/month, Contents - $64.19/month, Bundled - $161.88/month
State - Vehicle - $83.05/month, Contents - N/A*, Bundled - N/A*
Tower - Vehicle - $87.79/month, Contents - $83.79/month, Bundled - $153.88/month
*State’s quote tool for vehicle insurance was down as of writing
The table above shows a selection of vehicle and contents insurance quotes obtained through online quote tools. Care was taken to use the same details for each policy, but naturally, differences between policy features (such as excess and what is covered) will arise. Take note that AMI has the lowest priced contents quote but the highest-priced vehicle quote. Other companies reflect a similar pattern.
The lowest price for bundling as you can see in the table was from Tower at a combined $153.88 per month for Vehicle and Contents insurance. However, you will also see that you can build a slightly cheaper package by obtaining vehicle insurance from State and contents insurance from AMI, at $151.98 per month combined. Bundling can save you money, but differences between the premiums on different policies offered by the same company mean you can also build competitively priced packages by dealing with multiple companies. Just keep in mind there is far more to a quote than just its price.
Another consideration is most insurers tend to have different reputations for different policy types. An example of this is AA is rated by Canstar as the number one home and contents insurer by customer satisfaction, but State holds this award for vehicle insurance. We also see differences in what the policy covers. For example, AA and Tower will both cover lost or stolen keys under their comprehensive vehicle policy, whilst AMI and TradeMe will not. This can make it advantageous to have policies with different companies to ensure the best experience and in some cases prices.
Is bundling right for you?
Okay, so you know what to be on the lookout for. You know you need to do your research. But with all the jargon, fine print and different companies that’s easier said than done. That’s where Quashed comes in. Using the ‘Market Scan’ tool you can easily search for and compare quotes from leading insurance providers. Even better, you can compare not only the premium but even the policy benefits. This way you can find the cheapest price and the benefits that you care about most.
First, select the insurance you want to scan the market for e.g. Car insurance. Then either choose to upload and compare your existing policy or answer a few simple questions about your car and you. The information will feed into Quashed’s Market Scanner and it spits out a comparison table with different quotes and policy benefits. Work out what offering makes the most sense to your needs as well as budget, and take note of how others compare.
Most insurance companies, such as Tower, State and AA, may offer you 10% multi-policy discounts if you hold two policies. Some insurers such as State may increase this up to 20% if you hold more than two. With these in mind, take another look at your policy options and see if this makes bundling worthwhile.
If one company offers multiple policies that fit you well, bundling can be a great way to save some money. If you struggle to find a one-size-fits-all insurance provider, bundling probably isn’t for you. But that’s fine too, and with the price differences between providers, you might be better off with having a car policy with one insurer and your Home and Contents policy with another insurer. Thankfully you can bring all these different policies into Quashed so you can see and manage it all in one place.
The verdict
Unfortunately, there is no one-size-fits-all answer to whether or not you should bundle your insurance. Bundling can provide a way to streamline your policies while saving you some money. But your first priority when shopping for insurance should be to find a policy that fits your needs, and that might mean different providers for different insurance types.
Luckily, Quashed provides a quick and easy way to easily compare policies and prices between insurers. With Market Scan, you can make a more informed decision about whether bundling is right for you. Don’t forget you can also bring all your different insurance policies together as no one insurer does it all.
