Should I Bundle My Renters Insurance with Other Types?

Insurance bundlingInsurance can be expensive, and many people end up purchasing several kinds simultaneously. Leaving aside health, vision, and dental insurance, you may also buy renters’ insurance, auto insurance, life insurance, boat insurance, and so forth.

All these bills add up, and handling them separately can be a huge hassle. However, many insurance companies offer customers bundled packages, which include renters’ insurance plus one or more other types.

Why is renters’ insurance so critical in the first place? Is bundling your renters’ insurance with another type worth it? What are the benefits, and what are the drawbacks?

What Is Renters’ Insurance?

First, it’s worthwhile to consider why someone should get renters’ insurance at all. Many people don’t understand the breadth of what it covers.

Renters’ insurance is like a version of homeowners’ insurance. While the terms will vary between companies, this insurance typically covers several risks:

  • damage to your personal property, such as via fire, theft, or vandalism,
  •  to visitors’ property, if it happens within your home,
  • to other people’s items, done outside of your home,
  • liability induced by your property, children, or pets,
  • small alterations made to the property, and
  • damage caused if the property becomes uninhabitable, such as money owed for a temporary hotel stay due to a fire or flood.

Perhaps the most common misunderstanding about renters’ insurance is that it has to do with more than what goes on in your actual unit. While it doesn’t cover the actual structure you live in (that’s homeowners’ insurance), renters’ insurance may cover a theft, whether someone stole your possessions at home or at work.

One important reason to get renters’ insurance is that some landlords will require it. However, even if it’s optional, it may still be valuable. Most renters’ insurance isn’t very expensive, especially considering the peace of mind you gain. By bundling it with another type of insurance, purchasing it becomes an even more attractive proposition.

The Pros

Bundling multiple types of insurance can have several advantages. Maybe the most obvious is the reduction in paperwork and logistics. Most people find it easier to pay one bill for their insurance, rather than several separate bills. They may also find it easier to work with one company, rather than spreading their attention across multiple companies.

While the details may vary from company to company, you’ll typically receive a discount when you bundle more types of insurance. You may pay as much as 30% less. What’s more, you may see savings on your deductible. Many plans will include a clause saying that if one incident damages multiple assets, you’ll pay only the highest insurance deductible from your bundled plans.

The Cons

Like most economic decisions, there are drawbacks to bundling your renters’ insurance. For instance, bundling only makes sense if you’re interested in buying all the types of insurance in the bundle. If you don’t feel like it’s worthwhile to get life insurance, bundling life insurance with your renters’ insurance doesn’t make a lot of sense — unless, of course, the deal’s so agreeable that it changes your mind about life insurance.

Bundling your insurance can also make you less agile at making decisions about your insurance. The business model behind bundled insurance says consumers are more likely to stay with one company when all their insurance is handled by that company, and they’re also getting a discount. If you pull out of renter’s insurance through that company, you’ll likely pay more for the coverage you’re still getting.

Best Strategies

Weighing bundled policies can be a headache. If you’ve decided it’s a good idea, here’s some additional advice about how to pick the right bundle.

If you’re considering buying multiple types of insurance at once, it’s best to shop around and compare prices (both bundled and separate). In particular, experts report that companies that specialize in a given type of insurance (such as car insurance) may offer considerably lower rates than general insurance companies that bundle multiple plans together.

When comparing policies, you don’t want to simply go with the cheapest plan. Look carefully at what these plans cover, because some companies will bundle together insurance plans of radically different quality. Experts report that one of the most common configurations is an excellent auto insurance policy with a less impressive home insurance policy, but the mismatch can work in any direction.

Finally, if your bundled insurance is inexpensive month-to-month but comes with a very high deductible, you should consider finding another plan.

Many people avoid getting renters’ insurance, unless it’s required by a landlord. But it has several substantial benefits, and it’s an expense many people can afford every month. By bundling a renters’ insurance policy with other policies, this insurance can become even more affordable and attractive. However, it’s always important to check what the policy covers, and to remember that bundling policies may make changing coverage more difficult down the line.

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