You can get substantial discounts if you get your auto insurance policy from the same company that maintains your other insurance policies. Insurance companies give you a multi-policy discount to encourage you to buy more policies from them.
In spite of the fact that it pays to take advantage of a multi-policy discount, you may save more by buying your different policies from different insurers. I’ll take some time out to explain this…
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We will make a few assumptions on the quotes returned for a certain profile just for clarification purposes. Viz…
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 very clear, the insurer who presented the best quote for auto insurance did not have the most affordable for any other policy.
So here’s what he would pay on the whole with a 10% discount if he insists to still buy all his policies from Insurer B…
$1,472 + $2,120 + $2,72 = $6,316
$6316 – (ten percent of $6316) = $5,684.40
However, if he makes his purchases from insurance companies who offer him the best rates for each policy his total insurance spend would be…
$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 saved by buying from different insurers.
$1,172.40 is certainly not an amount you should throw away and that’s what he would have lost if he opted for a multi-policy discount.
This is interesting; but how do you determine which yield more savings considering that another individual might actually be better off with a multi-policy discount?
The way out is simple…
Make out some time to get and compare quotes for each insurance policy from at least three quotes sites. Select the cheapest rates obtained for each insurance policy and then simply compare their sum with the amount you will pay after a multi-policy discount and you’d know which is more beneficial in your case.
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