How to Bundle Auto and Homeowners Insurance to Save Money

Last Updated on March 9, 2021

If you look at any list of the best ways to save money on car insurance, you’ll see “bundling” near the top. It’s true: bundling is one of the easiest and most effective ways to save money on car insurance.

But what exactly is bundling? How does bundling work? How can you bundle auto and homeowners insurance together to save money? Today, we’re explaining everything you need to know about bundling auto and homeowners insurance to save money.

What is Insurance Policy Bundling?

“Bundling” refers to the practice of getting multiple insurance products from a single company.

bundling home and auto insuranceInstead of having your car insurance with State Farm and your renter’s insurance through USAA, for example, you can bundle both insurance policies with one company, then get a discount.

Insurance companies give discounts to customers who bundle insurance policies for a simple reason: they want your business.

Fortunately, America’s insurance landscape is very competitive. The “big five” insurance companies all offer similar products and pricing. Sometimes, the only way to get a meaningful price difference between the big five is to bundle multiple policies together.

Bundling is an option for virtually everyone: whether you and your spouse drive two separate vehicles under different insurance companies or you own multiple properties, you should be able to save money by bundling.

How Much Can You Save By Bundling Home and Auto Insurance?

It’s not unusual for a family to spend as much as $2,000 to $6,000 per year on insurance premiums alone – including home and car insurance. Families with multiple vehicles or homes might spend even more than that. Bundling can save you 5% to 15%, which could lead to discounts of hundreds of dollars per year.

Ultimately, don’t expect to save an enormous amount of money by bundling: some people go into the bundling process expecting savings of 50% or higher. Bundling doesn’t lead to savings anywhere close to that amount. In fact, our friends at found that bundling led to insurance savings (on the total cost of home and auto insurance) of 3% to 10%. State Farm and Farmers provided the biggest discounts on bundled insurance packages (10% apiece) while Liberty Mutual provided savings of just 3%.

The following table shows how much one can expect to pay for home and auto insurance from each insurer, with and without the bundling discount:

InsurerAverage Annual Home Insurance RatesAverage Annual Auto Insurance RatesTotalBundling DiscountTotal (After Discount)
Liberty Mutual$2,494$2,360$4,8543%$4,708
State Farm$1,681$1,372$3,05310%$2,748

Advantages of Bundling Home and Auto Insurance Policies

Obviously, the biggest advantage of bundling insurance policies is that you can save money. This is the first and most important advantage of bundling insurance policies.

However, other advantages of bundling include:

  1. Minimize coverage gaps. Insurance companies know customers like to bundle policies. That’s why they build their policies to be “interlocking”. The coverage from your car insurance policy meshes perfectly with the coverage from your homeowner’s insurance policy, minimizing coverage gaps, and giving you additional peace of mind.
  2. Minimize overlap. For the same reasons above, bundling can reduce “overlapping” between insurance policies.
  3. Pay a single deductible. Many companies allow consumers with bundles to pay only one deductible instead of one deductible for each policy. You can pay the same deductible for your home and car insurance when bundling, for example.
  4. Convenience. Bundling car insurance with home insurance is always more convenient. You can deal with a single company, a single insurance agent, and a single bill each month.

Should You Always Bundle Your Home and Auto Insurance?

Bundling is popular, but it’s not always the right option. Some consumers fall into a “bundling trap” where they assume bundling is always going to give them the cheapest rates.

That’s not true! There are some situations where bundling is a bad idea.

For example, some companies might specialize in providing cheap home insurance. You might find a home insurance policy for $700. Your current car insurance company charges you $1,000 per year for car insurance. They give you a quote for $1,000 on home insurance, although the total price for both policies drops to $1,800 with bundling. In this situation, having two separate policies is the cheaper option – assuming you’re choosing the $700 home insurance package.

How to Bundle Insurance Policies

Bundling your home and auto insurance products is straightforward. Contact your new insurance company and explain the situation. You can cancel your current insurance policy immediately or wait for the policy to expire.

If you’re canceling your previous insurance immediately, make sure you’re aware of cancelation fees. Sometimes, cancelation fees can wipe out any savings from bundling.

Many people are unaware of the insurance products that can be bundled together into one insurance company. Many of the major insurance companies in the United States offer a full suite of insurance products. They don’t just specialize in auto insurance and home insurance. Some of the other policies you can bundle together with a single insurer include:

In general, it’s best to give your car or home insurance company at least 30 days’ notice of your intention to cancel your service. If you cancel before 30 days, then you may have to pay a cancelation fee. At the same time, make sure your new insurance policy is active before the old one expires: you don’t want to be left with any gaps in coverage.

What Are the Best Companies to Bundle Home and Auto Insurance?

Some companies make it easier to bundle homeowners and auto insurance policies together. Here is a list of the top 15 companies to budle home and auto insurance:

  1. USAA
  2. State Farm
  3. Allstate
  4. GEICO
  5. Progressive
  6. Nationwide
  7. Farmers
  8. Liberty Mutual
  9. Esurance
  10. Travelers
  11. Safeco
  12. MetLife
  13. Mercury
  14. Farm Bureau
  15. Erie Insurance

Final Word on Bundling Your Home and Car Insurance Policies

Bundling home and car insurance together is a proven way to save money on insurance. Many major insurance companies offer other bundling options as well, such as life insurance, renters insurance, motorcycle insurance, and pet insurance. Bundling can save customers 5 to 10% on their insurance policies. To learn which bundling options and discounts are available through your insurer, call your insurance agent today.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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