How do bundle discounts work with claims?

Bundle discounts typically remain even after claims, though overall premiums may increase based on claims history.

When you purchase insurance, bundling your home and auto policies together can often lead to a discount. This bundled discount is generally unaffected directly by a claim, meaning that you won’t lose your discount just because you make a claim on one of your policies. However, it’s important to note that while the discount remains, your overall insurance premium might increase after a claim. This is because premiums are also calculated based on your claims history; more frequent or severe claims could cause your rates to go up. Even with this increase, the bundled discount still applies, but it's overshadowed by the adjustment in the base premium due to the new risk assessment by the insurer after a claim.

Imagine you have both your homeowner's insurance and your car insurance with the same company, which offers you a bundle discount, reducing your total premium by 10%. One winter, your car skids on ice and you file a claim to cover the costs of repairs. The insurance company processes your claim, and you notice in your next renewal, your premiums are slightly higher. This is because the insurance company, after reassessing your risk due to the accident, determined a higher base premium. However, you still enjoy the 10% discount on this new premium because you maintain both policies with them.

To make the most of your bundle, keep both policies active and in good standing. If you need to make a claim, try to implement safety measures afterward to help maintain or improve your risk assessment by the insurer. For car insurance, this could mean attending a defensive driving course, and for home insurance, it might involve installing security systems. This proactive approach could help mitigate any potential premium increases after claims, allowing you to continue benefiting from the bundle discount while managing costs.