Multi-Policy Discount -- When It Makes No Sense
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by: ChimezirimOdimba
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Word Count: 326
You can get substantial discounts if you get your auto insurance policy from the same insurance company that provides your other insurance policies. Every insurance company will normally offer a discount if you buy more than one policy from their company.
However, it may not benefit you more to do this as you might be more profitabe if you buy each of your policies from different insurance companies. I will take some time out to explain this...
We will make a few assumptions on the rates returned for a certain individual just for explanation 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 insurance company who offered the cheapest rate for auto insurance did not have the lowest for any other insurance policy.
So this is what he would pay on the whole with a 10 percent discount if he insists to still buy all his policies from Insurer B...
$1,472 + $2,120 + $2,72 = $6,316
$6316 - (ten percent of $6316) = $5,684.40
Conversely, if he makes his purchases from insurers who give him the best rates for each policy his total insurance spend would be...
$1,400 + $1,472 + $1,640 = $4,512
This example shows that it's more beneficial for this prospect to buy from different insurers as he would make more savings that way.
$1,172.40 is definitely not an amount you should throw away and that is what he would have lost if he opted for a multi-policy discount.
You might be brainstorming on how to determine whether it is preferable for you to pass off a multi-policy discount or grab it.
The way out is quite easy...
Get a large number of quotes from various insurance providers for each policy. Pick the lowest quotes offered for each insurance policy and then just compare their sum with what you'll pay after a multi-policy discount and you'd know which is more beneficial in your case.
About the Author
To start saving much more click here: Affordable Auto Insurance and Discount Auto Insurance. Chimezirim Odimba is an insurance expert.
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