If you watch TV for more than 15 minutes, you will hear the slogan. A friendly gecko, a woman named Flo, or a guy in a red shirt will tell you: “Bundle your Home and Auto insurance and save big!”
It sounds like common sense. Buying in bulk usually saves money, right? If you buy the jumbo pack of toilet paper, the price per roll goes down. So, naturally, I assumed buying two insurance policies from the same company would be cheaper.
For seven years, I was a loyal customer to one big-name insurance company. I had my car, my wife’s car, and our house all on one convenient bill. I felt smart. I felt efficient.
Then, last month, I committed the ultimate sin of a “loyal” customer: I actually did the math.
What I found made me furious. I wasn’t saving money by bundling. I was paying a “laziness tax” of nearly $600 a year.
Here is the story of how I broke my bundle, why insurance companies punish loyalty, and how you can check if you are being ripped off too.
The “Price Creep” Phenomenon
The problem with bundling is that it makes you complacent.
When you have one complicated bill with three different policy numbers on it, you stop looking at the details. You just look at the “Total Amount Due” and pay it.
I went back through my old bank statements.
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Year 1: My total premium was $1,800.
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Year 2: It went up to $1,950. (I thought: “Inflation, I guess.”)
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Year 3: It hit $2,100.
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Year 7: I was paying $2,800 a year.
I hadn’t had any accidents. I hadn’t filed any claims—not even for the [Water Damage] incident I was worried about last winter. We were perfect customers. Yet, our rate had increased by 55% in seven years.
This is what industry insiders call “Price Creep.” They raise your rate by 5-8% every year, knowing that because you are “bundled,” you will think it’s too much hassle to switch.
The Experiment: Shopping Separately
I decided to run an experiment. I spent a Saturday morning calling different companies.
Step 1: The Auto Quote I called a company that only specializes in cars. They quoted me $900 a year for both cars. My current “bundled” price for cars? $1,400.
Step 2: The Home Quote I called a company that specializes in property insurance. They quoted me $1,100 a year for the house. My current “bundled” price for the house? $1,400.
The Math was undeniable:
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Current Bundle Price: $2,800
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New Separate Prices: $900 + $1,100 = $2,000
Even though I was losing the “10% Multi-Policy Discount” my old insurer bragged about, the base prices at the other companies were so much lower that I still saved $800 overall.
Why “Loyalty” is a Trap in Insurance
This leads to a hard truth about the insurance industry: New customers get better treatment than old customers.
Insurers spend billions on ads to get new people. To attract them, they offer “New Customer Discounts” and artificially low rates for the first year.
Once you have been with them for 3 years, their algorithm flags you as “Sticky.” They know you aren’t leaving. They know you have your autopay set up. So, they start removing those discounts.
They call it “Price Optimization.” I call it a “Loyalty Penalty.”
When Bundling Actually Makes Sense
Now, I don’t want to say bundling is always a scam. There are specific scenarios where it works.
1. If you have “High Risk” drivers: If you recently added a teen driver (like I wrote about in my Teen Driver Insurance article), some companies won’t even insure your kid unless you bring the parents’ cars and the house over too. In this case, bundling is about access, not just price.
2. If the “Umbrella” requires it: If you have a lot of assets and buy “Umbrella Insurance” (extra liability protection), many insurers require you to have both Auto and Home with them as a prerequisite.
3. If you value simplicity over money: Some people just hate passwords. If you are willing to pay an extra $300 a year to only have one app on your phone, then bundling is fine. Just know that you are paying for the convenience, not the coverage.
How to Break Your Bundle (Without a Headache)
If you suspect you are overpaying, don’t just cancel everything today. Breaking a bundle requires a specific order of operations to avoid gaps in coverage.
Step 1: Get the “Declarations Page”
Log into your current account and download the “Dec Page” for both your home and auto. You need to know your exact coverage limits (e.g., 100/300/100 for cars). You want to match these limits (“Apples to Apples”) when shopping.
Step 2: Shop “Monoline” First
“Monoline” means a single policy. Go to Geico or Progressive for Auto. Go to Lemonade or Hippo for Home. See what the separate prices are.
Step 3: The “retention” Call
Before you switch, call your current company. Say this exact script:
“I have been a loyal customer for 7 years, but I just got a quote for my Auto insurance that is $500 cheaper. I am planning to cancel my auto policy but keep my home policy. Can you re-rate my policy to match them?”
Sometimes, the threat of leaving unlocks a “Retention Discount” they were hiding from you.
Step 4: Watch the “Effective Dates”
If you switch, make sure the new policy starts on the exact same day the old one ends. Even a 1-day gap can trigger fines from the DMV or issues with your mortgage lender.
Conclusion: Stop Being Lazy
We spend hours researching which TV to buy to save $50. Yet we blindly pay insurance companies thousands of dollars a year without checking the price tag.
The “Bundle and Save” commercial is just marketing. It is not a rule.
My advice? Take one hour this weekend. Dig up your policy. Compare it against a competitor. You might find that your “loyalty” has been costing you a vacation’s worth of money every single year.