What to Know About Discounts for Multiple Insurance Policies

One of the more pleasant aspects of buying insurance can happen when you begin to buy multiple policies from the same company. While life and health insurance policies do not usually qualify in this area, most other insurance does. By being willing to purchase several policies from the same company, your savings can be big. You need to be careful about some of the discounts because there are times when you can save enough on one type of policy with a different company to more than offset any discounts.

Insuring multiple cars will usually bring you a nice discount.

Most people do not think about the fact that each car that is insured is a separate policy. Since they are listed together on the premium notice and the declarations page, it is assumed that this is one policy. In reality, each car is rated and insured separately. If you look at your policy, you will notice that each car has its own entries for each type of coverage. Unless you have identical cars, you will notice different rates based on the car type and the primary driver. Somewhere on the policy it will note that you have received a multiple-car discount. This can range from less than 5 percent to about 15 percent, depending on the insurer.

The most popular discount is noted when your cars and house are with the same insurance company.

Linking your homeowners' policy to your vehicle policies is the best way to get the biggest discount. Part of this is due to the fact that having a couple of cars plus a house and contents all with the same company represents a large amount of premium. Even if the percent of the discount is not large, the dollar value can seem quite big. This savings can seem impressive to first-time home buyers who were not expecting to have their car insurance rates decrease because they bought a house.

Watch out for agents who are too pushy about their great discounts.

This can be a sign that you are not really getting much of a savings. One of the things that agents will sometimes do is add in other policy options to raise the level of your overall premium. The idea is that since you are saving a chunk of money, you can afford more insurance.

The agent may lower deductibles or raise liability limits. Items like earthquake insurance or insurance to cover mechanical breakdowns of equipment in your house can raise premiums and be difficult to spot during the buying process. Some of these will never be used by most homeowners. Towing insurance and other add-ons can increase your insurance cost more than any discounts have lowered it.

Get several quotes both with the combined policies and with separate policies.

Doing this will help you spot true discounts. There can be times when the house insurance will be 10 percent cheaper, but the car policy ends up being somewhat higher. These discounts are great, but just make sure that you are actually saving money.