Getting an auto insurance policy from the same insurance company that provides your other insurance policies will get you a discount. Insurers give you a multi-policy discount to encourage you to buy more policies from them.

However, it may not benefit you more to do this as you might have more savings if you buy each policy from different insurers. I willexplain this further…..

We will make a few assumptions on the rates returned for a certain individual just for clarification purposes. Viz…

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

As is now very clear, the insurer who presented the best rate for auto insurance did not have the lowest for any other policy.

Assuming that he buys the three policies from Insurer B and gets a a 10 percent multi-policy discount, his total would be…

$1,472 + $2,120 + $2,72 = $6,316

$6316 - (10% of $6316) = $5,684.40

Conversely, he would spend the following amount on insurance if he buys from the insurer that offers him the most affordable rate for each policy…

$1,400 + $1,472 + $1,640 = $4,512

You have observed that although buying health and home insurance from the auto insurance provider may entitle him to multi-policy discounts, he’d be better off getting each policy from different insurance companies.

A reduction as high as $1,172.40 isn’t one that should be passed off.

You might be wondering on how to find out whether it’s preferable for you to ignore a multi-policy discount or grab it.

All that is required of you to do is just a simple process that will take you some minutes…

Get a large number of quotes from various insurers for each policy. Calculate what what will be your multi-policy discount and compare it with what you will spend if you buy from different insurance companies.

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