Texas homeowners have become conditioned to talk about the bundle when it comes to their insurance. There have been countless commercials about bundle discounts, bundle benefits, and bundle bundle bundle. But in recent months, home and auto bundles have taken on a very different meaning for many Texans like Kevin. Kevin is a homeowner who figured out that by calling two different "big name" insurance companies that advertise on TV a lot gave him the cheapest option having different companies handle the different types of insurance policies that he needed. As inflation has ruthlessly poached money from household budgets, we've seen an uptick in people agreeing with Kevin that the traditional multi-policy discount wasn't all that it is portrayed to be on the commercials.
But if you are in North Texas or Greater Houston like Kevin is, the need to bundle home and auto insurance is taking a new twist for Texans. Some of the homeowners insurance companies that have traditionally allowed you to only place your homeowners policy with them while keeping your auto policy with a separate company are receiving shocking mail. These companies are non-renewing your homeowners insurance as you approach the next renewal if you don't bundle your auto policy with them. Kevin got a letter detailing this exact process and was livid. This wasn't a part of his original insurance policy terms and he wasn't planning to make a change because money is so tight.
So what gives? Kevin was livid as I'm sure that you could guess. And he was full of questions! Can the current insurance company just drop you if you don't bundle? Can the big insurance carriers force you into a home and auto insurance bundle if you're shopping for new coverage? These new scenarios go far beyond multiple-policy discounts.
What Is An Insurance Bundle?
Insurance bundling refers to the practice of combining multiple insurance policies from the same provider into a single package of coverage. It allows individuals or businesses to consolidate their insurance needs and simplify their coverage by purchasing various types of insurance products, such as auto, home, and life insurance, as a bundle with a single insurance carrier. This approach not only offers convenience and ease of managing multiple policies in one place but can also provide potential savings through discounts or reduced premiums. By bundling insurance, policyholders can streamline their coverage, potentially benefiting from additional features, broader coverage, and cost-effective packages. It's easy to understand why the insurance companies like it, but does it serve a purpose for Texans like Kevin?
Purpose & Benefits of Bundling Home And Auto Insurance Policies
When you begin to break down the purpose and benefits of creating the common insurance bundle of home and auto together, it is not necessarily as one sided as Kevin might have thought. For the Texas homeowner, it serves the purpose of providing customers with convenience, cost-saving benefits, and expanded coverage benefits in some cases. By combining these two essential coverage types into one policy, individuals can simplify their insurance management while enjoying financial advantages.
Having one point of contact for your insurance policies rather than multiple companies with different numbers is fairly obvious to understand. Kevin got that part, but he wasn't seeing the sizable discount on his total insurance costs that are usually included in the television ads. He was looking at this as more of a financial decision than benefits. Which brings us to less obvious benefits that can be found when having your policies with a single company.
Other Benefits of Bundling Home & Auto Insurance Policies
With the pressure that Kevin was feeling on his monthly budget, he was looking for actual savings on his insurance premiums. He wasn't looking for free roadside assistance on his auto coverage, but some of the standard homeowners insurance policies that we offer at Insurance For Texans do provide some tangible benefits that ultimately caught Kevin's attention.
One of the main benefits of bundling home and auto insurance that is overlooked is how some companies treat hail deductibles. Given how frequently hail claims are made in Texas, working through how much money you have at risk during the spring and fall hail seasons is important to your family's budget. Especially if you live in one of the more hail prone counties like Collin or Denton.
What certain companies do in a hail situation when a customer has an insurance bundle is to have the homeowner pay a single deductible for all of your damaged property rather than paying separate deductibles for home and any autos damaged. Depending upon your deductible choices and how many vehicles you have damaged on your bundled auto insurance coverage, this could save thousands of dollars when it is not required to be paid as part of your policy benefits. That size of savings in hail country can offset the sizable policy premiums that are now being required for coverage.
Another advantage of bundling is that it can simplify insurance billing. Instead of having multiple insurance policies with different due dates and payment methods, bundling allows for a consolidated bill issued by a single insurance company. This can help streamline the payment process and reduce the likelihood of missed or late payments while also lowering payment fees that get tacked on to monthly auto premiums when they are paid.
The Downside Of Not Bundling
It is important to compare the coverage and policy terms offered by different insurance companies when you are purchasing. Things beside annual premiums matter when you do have that claim. Assessing and understanding the terms and conditions of non-bundled insurance policies is essential to ensure that the coverage adequately meets your needs.
Many insurance companies are so desperate to get you to bundle that you are putting harsh policy restrictions in place. If you're allowed to have separate policies with separate companies, many homeowners insurance companies are now putting stipulations on what your minimum wind and hail deductible can be. And it is not in the favor of Texas homeowners like Kevin. When your deductible pushes above a 3% minimum amount, you are essentially self-insuring your roof. That means the hailstorm that blows up your roof will end up costing you tens of thousands of dollars. You're obviously welcome to pay that out of your pocket, but that doesn't seem like a sound financial decision to us.
Can Insurance Companies Require Policyholders To Bundle?
When an agent from Insurance For Texans sat down with Kevin to help him sort through his coverage options and insurance quote, he wanted to know if it was legal to force him to bundle the coverage. He understood the desire of the insurance provider, but he was also trying to make the best decision he could given the benefits and the average premiums that he was seeing for the coverage he needed for his home and autos.
Most of the home and auto insurance companies have moved to insistence on bundling. They have shifted pricing models and coverage benefits to force you to make that choice on your own. We have seen legal claims that forcing Texas homeowners to "tie" the two purchases together is not in fact legal. Given that we are licensed insurance producers and not lawyers, we will let them fight that battle in court and worrying about mitigating your financial risk with the applicable insurance policies.
Given the grey nature that is involved with mandatory bundling, it is important to focus on what you may be giving up if you do not do this. Since the terms of individual policies can be modified based on the bundling of coverage, this means that you need to focus on the approval for coverage and what you have to give up if you don't when purchasing a new policy.
The final thought on this is that many of these big companies have had to file motions with the state department of insurance in order to be able to non-renew current policies that are not bundled. Since this has been approved by state regulators, they obviously are ok with the practice. This goes well beyond multi-policy savings or other discounts. It has everything to do with you being properly protected and the insurance companies staying solvent to pay claims.
Getting Home Insurance With Insurance For Texans
One thing that we know for sure is that working with an experienced insurance professional who understands Texas home and auto insurance is the key to navigating the current climate. True Texas Home Insurance can only be found at Insurance For Texans and allows you to understand what you're buying and what it will do when a claim is filed. Our independent insurance agents work with you to tailor a policy bundle that will meet your needs while making sure that it's the our most affordable option available to you.
If you are worried like Kevin, but want to remove insurance hassles, feel free to let our licensed agents help you navigate the murky waters that have been created by the big insurance companies. Call us at 469.789.0220 or click the button below to get True Texas Home Insurance to protect your family today.