Does Bundling Insurance Cover Make Sense?

Every time a South African is planning to buy some kind of an insurance policy, he is advised by many people and even insurance brokers to consider bundling his insurance cover. However, very few people understand what bundling insurance cover means or whether it is useful.

Bundling insurance cover would mean that you would buy all your insurance policies from one insurance provider only. In other words, you would be buying an insurance package from an insurance provider which would include everything from protection for your home to your car.

It is worth mentioning that while insurance providers offer set insurance packages to potential customers it is also possible for you to modify this package to suit your specific needs. For example, while you may need home and vehicle insurance, you may not need jewellery cover which is also a part of the package.

The reason why bundling insurance cover is recommended by so many people to so many people is that insurance companies offer discounts to customers who are interested in doing this.

Regardless of which insurance policy provider you have chosen, if you show an interest in bundling all your insurance needs then you would be offered a hefty discount for doing so.

More often than not, bundling insurance cover turns out to be beneficial for the customer. There are numerous benefits of choosing to bundle your insurance cover under one package policy provided by one insurance company. Consider the following:

1. Discounts to save money:
As mentioned above, in order to get more business, insurance companies offer significant premium based discounts to people who want to bundle multiple insurance policies under one package.

This means that a bundled car and home insurance policy would turn out more economical than a single car insurance policy and a separate home insurance policy combined.

2. Possible leeway in excess:
There are other benefits of bundling insurance cover under one package as well. For instance, some insurance policy providers have a system where if a disaster has resulted in damage to both a car and home, then the policy holder would only have to pay the higher excess.

In other words, consider a situation where a storm damages your home and your car. If the maximum excess for your vehicle is R500 and for your home it is R1, 000 then some insurance policy providers would require you to only pay R1, 000 for repairing both the home and car.

3. Convenience of just one contact:
A lot of time can be wasted on paying your dues to different insurance companies and maintaining the paperwork for them. Therefore, another benefit of bundling insurance covers is that you would not have to worry about dealing with multiple insurance policy providers.

While bundling insurance cover is advantageous in most cases, sometimes it is not. Some people, while comparing bundled insurance covers with separate policies have found that the latter turns out to be more economical to them in the long run.

For example, many dedicated vehicle insurance policy providers offer discounts and coverage that are unmatched by bundled covers and prices. The result is that car insurance from such companies turns out to be cheaper.

Hence, if you are asking yourself if bundling insurance cover makes sense then the answer is that it does as long as you approach the situation with an analytical bent of mind.