Potential Problems Of Having A Bundled Policy
Having our car, health, and home insurance with the same provider sounds like a great idea. It saves time when filing a claim, your full record is with the same company and let’s be honest special prices are available too. Insurance providers love to bundle products, and for a good reason, bundling encourages consumers to buy more and who does not like a one-stop-shop. However, even a one-stop-shop has a rat, in insurance bundling policies could lead to potential problems if you are not careful. Let’s start by defining the bundle policy and look into those problems and solutions.
Bundle policy means you are purchasing multiple insurance policies from a single company. For instance, if you are buying your car, health, and home insurance from the same insurance provider, you will be bundling your policy.
A bundled policy might be cheap and convenient but still not meet your needs.
Insurance is the one thing that you purchase and hope never to use. Knowing that all your potential issues are taken care of with one company should be compelling and should give you peace of mind, but what happens when that does not suit your needs?
Each time you pay your monthly premium, you’re paying to keep the coverage in place and available, not actually to use it. However, because you are not using it, you will not get immediate feedback about the quality of the coverage you’re buying and how it fits your changing needs. You won’t be prompted to purchase supplemental coverage or get an entirely different policy. Instead, the feedback comes when you file a claim.
At that point, unfortunately, it’s too late to fix any problems that may exist in your coverage. So if you bought a bundled policy based on its price and convenience, and not because it met your specific coverage needs, you could be in real trouble if disaster strikes. Instead of getting a car upgrade, you may be scrambling to pay for expensive repairs to your car or home or worse, paying for someone else’s medical bills.
You might get stuck with the same insurance provider long after you decide you want to take your business elsewhere
Regardless of the discounts and convenience bundling insurance policies might bring, there can be disadvantages to this model. The major one being some insurers might make it difficult for you to change insurance companies. Nobody wants to lose a big client and a couple of years down the road. You might realize that you are stuck with a bundle that only represented savings for a couple of years but suddenly increased after some time. When you decide you want to try a different insurance provider, they make it next to impossible for you citing contracts and other legalities leaving you with no choice but to stay on as a customer. That is why it is better to always keep your options open, besides having the convenience of having all your policies with just one company might make you miss other discounts, promotions or special prices with other companies.
The main reason why consumers go for bundling policies is so that they can save money. Well, bundling policies isn’t the only way to save money on monthly insurance premiums. It may not even be the best way, depending on individual needs.
How can someone save on their insurance policy?
- Buying only what you need
It is important to know that insurance is not a one size fits all product. If your policy is too small, you could have problems replacing your property or if its too big you could end up paying too much every month. So you really need to be smart in determining whether you need the insurance. Another thing is the cost, if your property cost a third getting two thirds in insurance means you are paying for insurance you couldn’t likely ever use.
- Improving your property
Cars with up-to-date safety features cost less to insure for one simple reason, “You are less likely to be in an accident that requires a claim”. The same holds true for your house or any other valuable property. Even though you are insured, better care of your valuables helps you save money.
Originally published Aug 26, 2019 15:32:25 PM, updated May 16, 2021