One of the most common ways Ontario residents save on insurance is by bundling their home and auto policies with the same insurer. But is bundling actually worth it? This guide examines the pros, cons, and real savings potential of combining your insurance policies.
What Is Insurance Bundling?
Insurance bundling, also called multi-policy discount, means purchasing multiple insurance products from the same company. The most common bundle is home (or tenant/condo) insurance combined with auto insurance, but bundles can also include:
- Auto + Home/Property insurance
- Auto + Tenant/Renters insurance
- Auto + Condo insurance
- Multiple vehicles + Home
- Auto + Home + Life insurance
How Much Can You Save by Bundling?
The typical savings from bundling home and auto insurance in Ontario ranges from 5% to 15% on each policy, though some insurers offer even higher discounts. Here's what this could look like in practice:
Example Savings Calculation
| Policy Type | Separate Policy Cost | 10% Bundle Discount | Annual Savings |
|---|---|---|---|
| Auto Insurance | $2,000 | $1,800 | $200 |
| Home Insurance | $1,200 | $1,080 | $120 |
| Total | $3,200 | $2,880 | $320 |
These savings can add up significantly over time. Over 10 years, this example would save $3,200.
Advantages of Bundling Insurance
1. Guaranteed Savings
The multi-policy discount is one of the most reliable ways to reduce your insurance costs. Unlike some discounts that require specific qualifications, bundling is available to virtually anyone who needs both types of coverage.
2. Simplified Management
- One company to deal with for all your insurance needs
- Single renewal date (often can be aligned)
- One point of contact for questions and claims
- Simplified billing and payment
3. Loyalty Benefits
Bundling often qualifies you for additional loyalty perks, including:
- Claims forgiveness programs
- Increasing discounts over time
- Priority claims service
- Additional coverage options
4. Easier Claims Process
If an incident affects both your home and vehicle (such as a tree falling on your car in your driveway), having one insurer can simplify the claims process.
Potential Drawbacks of Bundling
1. May Not Always Be the Cheapest Option
While bundling provides a discount, it's possible that separate policies from different insurers could still be cheaper overall. This happens when:
- One insurer has significantly better rates for one type of coverage
- Your risk profile is better suited to specialized insurers
- The bundle discount doesn't offset the base rate difference
2. Reduced Flexibility
Bundling can make it harder to switch insurers because:
- You may lose the bundle discount if you move one policy
- Policy renewal dates may be synchronized
- You might feel locked into staying with one company
3. Not All Insurers Offer Both Products
Some insurers specialize in either auto or home insurance but not both. Bundling limits your options to insurers that offer multiple products.
When Bundling Makes Sense
Bundling is typically a good choice when:
- The insurer has competitive rates for both products: Don't bundle just for the discount if the base rates are high
- You value convenience: Managing one insurance relationship is simpler
- You're starting fresh: When shopping for new coverage, comparing bundle quotes is easy
- Your policies renew around the same time: Makes switching to a bundle seamless
When to Consider Separate Policies
You might save more with separate insurers when:
- You have a specialized insurance need: High-value home, classic car, or unique circumstances
- One insurer has significantly better rates: A specialized auto insurer might beat a bundled rate
- You've done the math: Actual quotes show separate policies are cheaper
How to Compare Bundle vs. Separate Policies
Step 1: Get Bundle Quotes
Request combined home and auto quotes from several insurers. Make sure you're comparing equivalent coverage levels.
Step 2: Get Separate Quotes
Also request standalone quotes for each type of coverage from various insurers, including those that specialize in one type.
Step 3: Calculate the True Comparison
Add up the separate policy costs and compare to the bundled total. Remember to factor in:
- All applicable discounts
- Coverage differences
- Deductible amounts
- The value of convenience
Tips for Maximizing Bundle Savings
- Ask about all available discounts: Bundle discounts can often be combined with winter tire, multi-vehicle, and other discounts
- Review annually: Rates change, so compare options each year at renewal
- Consider all bundle options: Adding tenant insurance to auto is often very affordable
- Negotiate: If you find a better deal elsewhere, ask your current insurer to match it
- Time your switch: If moving policies, try to align renewal dates to maximize convenience
The Bottom Line
For most Ontario residents, bundling home and auto insurance provides meaningful savings and added convenience. The typical 5-15% discount on each policy can add up to hundreds of dollars per year. However, it's always worth comparing both bundled and separate quotes to ensure you're getting the best overall value.
Ready to see if bundling saves you money? Get your free Ontario car insurance quote and discover all available discounts.