What Is Home and Auto Insurance Bundling?

Some insurance companies offer bundled policies, combining different types of insurance—like home and auto coverage—into a single package. Bundling is often marketed as a convenient way to manage multiple policies while potentially saving money through discounts.

However, it’s important to evaluate whether it actually provides the best value. In some cases, it may not be the most cost-effective or suitable option. In this article, we’ll be taking a look at some of the hidden disadvantages of bundling your insurance policies. 

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Why Do Insurance Companies Promote Bundled Packages?

Bundling is heavily promoted because it benefits insurance companies in several ways:

• Customer Retention: Having multiple policies with one provider makes customers less likely to switch insurers, as it feels more convenient to keep everything in one place.

• Higher Premiums: Bundled policies may offer discounts, but they can also lead to higher total costs if one of the policies isn’t competitively priced.

• Marketing Strategy: Bundling is often positioned as a way to save money, but the actual savings vary depending on the type and level of coverage.

How to Compare Bundling vs. Separate Policies

If you're considering a bundled package, here’s how to evaluate whether it’s truly the best option:

• Get Multiple Quotes: Start by requesting quotes for both a bundled package and separate policies for auto and tenant insurance.

• Know How Much Insurance You Need: Some insurance companies may offer tenant insurance with higher limits than you actually need, making your policy unnecessarily expensive.

• Check Deductibles: A bundled policy might have a higher deductible that negates potential savings, depending on your situation. Read our article The Pros and Cons of a High Deductible Tenant Insurance Policy to learn more.

• Look Beyond Price: Consider customer service, claims handling, and policy flexibility.

• Factor in Discounts: Some standalone policies offer competitive rates that rival or beat bundled discounts.

Why Separate Insurance Policies Can Be a Better Choice

Many bundled insurance policies offer basic coverage, which can either leave you underinsured or include unnecessary extras that drive up costs. A provider specializing in tenant insurance may offer:

• More Relevant Coverage: Policies tailored specifically for renters, rather than modified homeowners insurance.

• Lower Premiums: Competitive pricing that reflects the actual coverage tenants need, without over-insuring.

• More Flexibility: Options to customize policies without being locked into a package deal.

Real-World Cost Comparisons

We've outlined real-world examples of how much tenants are currently paying for tenant insurance as part of a bundled package and how much they could save by switching to APOLLO. These examples reflect identical coverage amounts, ensuring that our customers get the protection they need at a lower cost.

Data provided by our Chief Underwriting Officer, Marco Andolfatto. 

How Insurers Structure Bundling Discounts

Insurance companies use bundling discounts as a marketing tool, but the actual savings can vary significantly. While a bundled package may advertise a percentage off, the way this discount is structured often benefits the insurer more than the customer.

Uneven Discounts on Each Policy

Some companies may apply the discount unevenly—reducing the cost of one policy (like auto insurance) while keeping the other (like tenant insurance) at a higher-than-average rate. This means you may save on one policy but still pay more overall. 

Pro Tip: In some cases, bundling discounts may be introductory, meaning they disappear after the first policy term, leading to an unexpected rate increase at renewal.

Make Sure You Have the Flexibility You Need

Some bundled policies have strict terms, making it difficult to remove or change one policy without losing the entire discount. If your situation changes—such as moving to a new province or switching vehicles—you may find yourself locked into a less competitive policy.

When considering a bundling discount, always request separate quotes for each policy to see if the savings are real. A truly cost-effective insurance plan should provide competitive pricing on each policy, not just an attractive package deal.

APOLLO offers effortless tenant insurance designed to protect renters across Canada. Get your free quote in less than a minute and we’ll send your policy documents right to your inbox.

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