Buying an auto insurance policy from the same insurance company that provides your other insurance policies will get you a discount on all insurance policies. Insurance companies offer a multi-policy discount to persuade you to buy other policies from them.
In spite of the fact that you can save a lot with a multi-policy discount, you may realize much more savings by buying your different policies from different insurance companies. I will take more time out to explain this...
Let us assume that a certain individua has the following rates from three different insurance companies...
Insurer A...
Auto insurance: $2,487
Home insurance: $1,400
Health insurance: $2,320
Insurer B...
Auto insurance: $1,472
Home insurance: $2,120
Health insurance: $2,724
Insurer C...
Auto insurance: $3,500
Home insurance: $2,080
Health insurance: $1,640
You can plainly see that notwithstanding that Insurer B offers this profile the best rate for auto insurance it did not have the cheapest quotes for the other insurance policies..
Hence, even if this insurance company gives him a 10% multi-policy discount the sum spent on insurance would be...
$1,472 + $2,120 + $2,72 = $6,316
$6316 - (10 percent of $6316) = $5,684.40
Conversely, he would spend the following on insurance as a whole if he goes for the insurer that offers him the most affordable rate for each policy...
$1,400 + $1,472 + $1,640 = $4,512
So even though he'll get a multi-policy discount if he buys all his policies from one he'll not save as much as he saved by buying from different insurers.
In this instance he will save $1,172.40!
You might be wondering on how to know whether it is preferable for you to ignore a multi-policy discount or grab it.
The answer is simple...
Get a good number of quotes from different insurance companies for each policy. Select the most affordable quotes offered for each insurance policy and then simply compare their total with the amount you will pay with a multi-policy discount and you'd know which is better in your case.
In spite of the fact that you can save a lot with a multi-policy discount, you may realize much more savings by buying your different policies from different insurance companies. I will take more time out to explain this...
Let us assume that a certain individua has the following rates from three different insurance companies...
Insurer A...
Auto insurance: $2,487
Home insurance: $1,400
Health insurance: $2,320
Insurer B...
Auto insurance: $1,472
Home insurance: $2,120
Health insurance: $2,724
Insurer C...
Auto insurance: $3,500
Home insurance: $2,080
Health insurance: $1,640
You can plainly see that notwithstanding that Insurer B offers this profile the best rate for auto insurance it did not have the cheapest quotes for the other insurance policies..
Hence, even if this insurance company gives him a 10% multi-policy discount the sum spent on insurance would be...
$1,472 + $2,120 + $2,72 = $6,316
$6316 - (10 percent of $6316) = $5,684.40
Conversely, he would spend the following on insurance as a whole if he goes for the insurer that offers him the most affordable rate for each policy...
$1,400 + $1,472 + $1,640 = $4,512
So even though he'll get a multi-policy discount if he buys all his policies from one he'll not save as much as he saved by buying from different insurers.
In this instance he will save $1,172.40!
You might be wondering on how to know whether it is preferable for you to ignore a multi-policy discount or grab it.
The answer is simple...
Get a good number of quotes from different insurance companies for each policy. Select the most affordable quotes offered for each insurance policy and then simply compare their total with the amount you will pay with a multi-policy discount and you'd know which is better in your case.
About the Author:
To learn more go to Affordable Auto Insurance and Discount Auto Insurance. Chimezirim Odimba writes on finance.
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