When you buy a new home, chances are you’re buying new home insurance as well. Your mortgage lender will generally require you to show proof that you have homeowners insurance on your new property. It’s a way to protect their investment, and yours.
While you’re in the insurance market, your new home could also be a good time to take a look at your auto insurance. Doing so may be able to help save you money and headaches.
6 reasons to review your auto insurance when you buy a house
1) You might get a “bundle” discount.
Companies prize loyalty, and it’s no different for insurance providers. Insurers often offer generous discounts to customers who have more than one policy with the company. It’s called “bundling,” and it can result in savings of 5% to 15%, or even more.
2) You can keep everything in one place.
The 10 largest auto insurance companies command 73% of the market, and all of them offer other insurance products as well. Beyond any bundle savings you get, it’s often easier to have multiple policies with one company. You can log in to one online account, pay just one company and keep track of your policies more simply.
3) Auto insurance rates can vary by state.
Auto insurance premiums can be very different from state to state, and each company has its own prices. If your new home is in a different state, your current auto insurance company may no longer be the best fit.
4) You might get a homeowners discount.
Some auto insurance companies offer what’s known as a “homeowners discount,” or a price break simply based on owning your own house. You don’t need to have your homeowners insurance policy with the same company to get this particular discount, but you will likely have to prove that you own your home.
5) Your employer may offer a discounted rate.
If your new house also comes with a new job, check to see if your employer offers a group rate on auto insurance. You might be able to qualify.
6) You might want more auto insurance.
As a new homeowner, you now have a substantial asset. If you’re at fault in a car accident, the person you hit may be able to come after you if your auto insurance can’t pay enough. You’ll have to pay the difference out of your own pocket, and this could put your home in jeopardy if you are sued. With this in mind, buying a new home might be a good time to increase the insurance limit on your auto insurance policy to keep this from happening. You might also consider “umbrella” coverage, which helps pay when all your other insurance is exhausted.
Tips for Shopping for Auto Insurance
Before you lock in to any particular auto insurance company, it’s important to shop around. Here are a few tips to help as you review your car insurance policy.
Pay close attention to what policies cover. Not every auto insurance policy has the same coverage or deductible. For example, one policy may include $50,000 of property damage coverage, and another may include $100,000. As you compare each policy’s price, be sure that they’re covering the same things. Try to get at least three quotes before you decide.
Make sure you have enough coverage. Basic auto insurance policies cover personal injury for occupants of a car in an accident and property damage. But auto insurance policies have a limit on each of these coverages. Make sure the one you choose is high enough to replace your car should you need to, and enough to cover medical bills for any injuries from an accident.
Consider “optional” coverage. Most states have requirements on the type of auto insurance you must have. But there are optional items as well. These can include collision coverage, which pays for damage to your car if you run into an object like a tree, and uninsured motorist insurance, which pays for your damage if the person you’re in an accident with does not have insurance. Find out what your state requires and then consider the rest.
Watch your credit score. Auto insurance companies often take into account your credit history alongside your driving record and type of car when coming up with your price quote. That’s because credit scores tend to be a good predictor of your likelihood of filing a claim. Take a look at your credit report before shopping for auto insurance to make sure everything is correct.