Absolutely Legal and Common
You can get insurance from two different companies for your home and car. You are not required by law to get all of these plans from the same company. A lot of people are able to keep their home and car insurance plans separate and still be covered properly. This is especially true when certain insurance companies offer reasonable rates or specific coverage for their home or car. In the insurance market, this kind of deal is completely normal.
Financial Implications to Consider
The most significant consideration when separating policies is the potential loss of multi-policy discounts. Bundling typically offers premium reductions of 10-25% across both policies. When calculating whether separate policies make financial sense, compare the total premium costs after accounting for these lost discounts. Sometimes, even without bundling discounts, separate specialized insurers can offer better total pricing.
Convenience Factors
Having different policies means dealing with different billing cycles, customer service offices, and ways to file claims. Some customers think that this extra paperwork is more trouble than it's worth for the small savings. Others like how simple it is to only deal with one insurance company. However, since most insurance companies now offer powerful online account management, this problem has become much less of a bother in recent years.
Strategic Advantages of Separation
Separate policies can provide strategic advantages in certain situations:
- When one insurer specializes in high-risk properties but has expensive auto rates
- When your driving record might negatively impact your homeowner's premium in a bundled scenario
- When you need specialized coverage (classic cars, high-value homes), it is best provided by different carriers
- When different renewal dates give you flexibility in budgeting for premium payments
Making the Transition
If you currently have bundled policies and want to separate them:
- Ensure new coverage is in place before canceling existing policies
- Verify there are no early termination penalties
- Consider timing transitions near renewal dates to avoid return premium complications
- Inform mortgage lenders about home insurance changes as required
Periodic Reassessment
Insurance markets change frequently. Even if separate policies make sense today, reassess the bundling option every 1-2 years by requesting new quotes. Market conditions and your personal circumstances change, potentially altering the financial equation in favor of bundling or separation over time.