Buying an auto insurance policy from the same insurance company that provides your other insurance policies will get you a discount. It is called a multi-policy discount.
Even though you can save a lot with a multi-policy discount, you may save more by buying your various policies from different insurers. I’ll take some time out to explain this…
Let us imagine that a certain profile gets the following rates from 3 different insurers…
Insurer A…
Auto insurance: $2,487
Home insurance: $1,400
Health insurance: $2,320
Insurer B…
Auto insurance: $1,472
Home insurance: $2,120
Health insurance: $2,724
Insurer C…
Auto insurance: $3,500
Home insurance: $2,080
Health insurance: $1,640
As is now obvious, the insurance company who presented the best rate for auto insurance did not have the best for any other policy.
Hence, even if Insurer B offers him a 10% multi-policy discount his total insurance spend would be…
$1,472 + $2,120 + $2,72 = $6,316
$6316 – (10% of $6316) = $5,684.40
But here’s what he would spend if he gets each policy from the insurer with the best quote for a given policy…
$1,400 + $1,472 + $1,640 = $4,512
So even though he’ll get a multi-policy discount if he buys all his policies from one he’ll not save as much as he did by buying from different insurers.
In this case he will save $1,172.40!
This is great; but how do you know which yield more savings considering that someone else could actually be better served by a multi-policy discount?
The way out is simple…
Create some time to get and compare quotes for each of your different insurance policies not less than three quotes sites. Pick the cheapest quotes obtained for each insurance policy and then simply compare their sum with what you’ll pay with a multi-policy discount and you’d know which is more advisable for you.
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Tags: Cars, autoinsurance, auto, Cars
