Why does the premium drop when you add home insurance to an auto insurance?
by admin ~ July 25th, 2007 . Filed under: Insurance .
SK asked:
When one has auto insurance alone, insurance companies state that if one is to also get home insurance from the same company, the sum of the two insurances will be less than the original auto insurance alone… Why should insurance companies take less premium for providing more service?
Wilbert Cubbison
When one has auto insurance alone, insurance companies state that if one is to also get home insurance from the same company, the sum of the two insurances will be less than the original auto insurance alone… Why should insurance companies take less premium for providing more service?
Wilbert Cubbison
July 27th, 2007 at 7:43 pm
Because homeowners tend to be much more careful drivers than renters or folks living with their parents.
As a result, they tend to make a lot less insurance claims.
July 27th, 2007 at 11:36 pm
I don’t beleive you get free house insurance if you buy car insurance with the same company,
I have seen incentives of $ 50 or so if you buy both from the same company
July 31st, 2007 at 5:12 am
they will get there money when you make a claim on both your accounts
July 31st, 2007 at 6:09 pm
Because you are giving them all your business, they will give you a break. The more people that have coverage with the company the more profitable it will be for the insurance company.
August 2nd, 2007 at 12:48 pm
Because they are getting all of your insurance premiums instead of one. Our insurance company gives a discount for having our house and autos insured with the same company.
August 4th, 2007 at 3:31 pm
Cheaper by the dozen
August 4th, 2007 at 4:22 pm
Its an incentive to keep all your policies with them and in doing so they give you a multipolicy discount as well they give you a discount when you have more than one car as a thank you for your business
August 5th, 2007 at 6:25 pm
It’s a “package discount” - an incentive to write BOTH lines of business.
They do that, because experience shows that if you have one policy with one company, and another with a different company, they’re less likely to retain your business - ie, the OTHER company has an “in” to write the rest of your business easier.
August 6th, 2007 at 5:40 am
they give you a discount on both because you are paying them more money.
August 6th, 2007 at 1:00 pm
No, what happens is they give you a break on the combined insurance, not less than the car ins. for both. You get a small discount for both of them because they want all of your business. That is just good business and an incentive for people to insure with one company and they use it to get more business. If you get that deal let me know who it is, I think you are wrong about the way it is stated, it is a discount for both, not less that your car insurance to cover both car and home…noooo. Shop around every 2-3 yrs. for insurance and always give your present company the chance to match the new company if you find a better deal, they may match to keep you as a customer. Also, make sure you get the exact same coverage, that is comparing apples to apples and not oranges. That way the comparison is fair. Always be honest about any claims when shopping around they can drop you if you lie and then you will have a hard time getting coverage if the claim was a big one and you weren’t honest. Insurance Co’s. like honesty. Another way to lower the costs is to make the deductibles higher, you hope to not have to use it but a $500. or $1,000. deductible can save you a lot in premiums each year that you don’t use the insurance for a claim. So, always ask what the difference would be to see if it makes sense for you. If you have young drivers in the home you may not want to go this way , a fender bender may be ominent. lol. Good luck.
August 8th, 2007 at 9:53 pm
Most problems occur with people that are monoline(1 car only) auto policies. Statistically, someone who cares enough to insure their renters property or someone who owns a home gets in less accidents & has less claims. The key is finding the company with the best discount. My old company was at 5%. I went online & found one at 25%. You may want to try getting a quote online. I am paying less than ½ of what I was before.
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Take care,
Casey