Is Bundling Home and Auto Insurance Actually Cheaper?
Last Updated: January 2026
Reading Time: 7 minutes
Every insurance commercial tells you to "bundle and save." State Farm, Allstate, Progressive—they all promise 15-25% discounts when you combine your home and auto insurance with them.
But here's the question nobody asks: Is bundling with one carrier actually cheaper than splitting your policies between two carriers?
The answer is more complicated than the commercials suggest. Sometimes bundling saves you money. Sometimes it costs you more. This article breaks down exactly when bundling makes sense and when you're better off splitting your coverage.
The Bundling Promise vs. Reality
What Insurance Companies Tell You:
"Bundle your home and auto insurance with us and save up to 25%!"
What They Don't Tell You:
That 25% discount is off their rates—which might have been overpriced to begin with. You're getting a discount on a potentially inflated baseline.
Example:
Carrier A (Bundled):
- Auto: $1,200/year (with 20% bundle discount applied)
- Home: $1,800/year (with 15% bundle discount applied)
- Total: $3,000/year
Carriers B + C (Split):
- Auto with Carrier B: $900/year (no bundle discount, just their competitive rate)
- Home with Carrier C: $1,500/year (no bundle discount, just their competitive rate)
- Total: $2,400/year
You "saved" 20% by bundling with Carrier A—but you would have saved $600/year by splitting between Carriers B and C.
This happens all the time. The bundle discount is real, but it doesn't guarantee you the best overall price.
When Bundling Actually Saves You Money
Bundling isn't a scam—it genuinely saves money in specific situations. Here's when it works:
1. You're a Perfect Fit for One Carrier's Underwriting
Some carriers have "sweet spot" customer profiles they price aggressively to attract. If you match that profile for both auto and home, bundling with them can be your best deal.
Example: State Farm often offers excellent bundled rates for:
- Excellent credit scores (750+)
- Clean driving records (5+ years)
- Suburban locations
- Newer homes
- Long-term customers
If you check all those boxes, State Farm's bundle might legitimately be your cheapest option.
2. You Have Minimal Risk Factors
If you're a low-risk customer across the board—no tickets, no claims, good credit, safe location—bundling discounts can stack favorably because you're already getting good base rates.
3. One Carrier Dominates Your Market
In some Alabama ZIP codes, certain carriers have such strong market positions that their bundled rates beat competitors even without the discount. This varies by location.
4. You Value Simplicity Over Savings
Some people prefer one bill, one agent, one company—even if it costs $200-300 more per year. If convenience is worth that to you, bundling makes sense.
When Splitting Policies Saves You More
1. You Have Mixed Risk Factors
If you're low-risk for auto (clean record) but higher-risk for home (older roof, tornado zone), different carriers will price you differently.
Example:
- Carrier A sees your old roof and quotes $2,500/year for home
- Carrier B specializes in older homes and quotes $1,800/year
- Carrier A offers great auto rates at $900/year
- Carrier B's auto rates are $1,200/year
Best move: Auto with Carrier A ($900), Home with Carrier B ($1,800) = $2,700 total
Bundling with A: $900 auto + $2,500 home - 15% discount = $2,890
Bundling with B: $1,200 auto + $1,800 home - 15% discount = $2,550
Splitting wins in this case.
2. You're in a Competitive Market
Birmingham, Pelham, and Hoover have dozens of carriers competing for business. In competitive markets, splitting policies often beats bundling because you can cherry-pick each carrier's best product.
3. One Policy Has Claims History
If you have a home claim but clean auto record, home carriers will price you higher—but auto carriers won't care. Splitting lets you avoid cross-contamination.
4. You're Shopping Multiple Carriers
If you're working with an independent agent who quotes 10+ carriers, they can mathematically determine whether bundling or splitting saves more. Captive agents (State Farm, Allstate) can only show you their bundle.
Real Alabama Examples: Bundling vs. Splitting
Example 1: Young Family in Pelham
Profile:
- Ages 34 and 36, two cars
- $275,000 home, 8 years old
- One speeding ticket (3 years ago)
- Good credit (720)
Bundled with State Farm:
- Auto: $1,380/6 months (with bundle discount)
- Home: $1,950/year (with bundle discount)
- Total: $4,710/year
Split Strategy:
- Auto with Progressive: $1,150/6 months (they don't penalize the old ticket as much)
- Home with Safeco: $1,680/year (competitive in Pelham)
- Total: $3,980/year
Savings by splitting: $730/year
Example 2: Retired Couple in Cullman
Profile:
- Ages 68 and 66, two cars
- $185,000 home, 22 years old
- Perfect driving records
- Excellent credit (805)
Bundled with State Farm:
- Auto: $720/6 months (with bundle discount + senior discounts)
- Home: $1,420/year (with bundle discount)
- Total: $2,860/year
Split Strategy:
- Auto with Progressive: $780/6 months
- Home with Auto-Owners: $1,280/year
- Total: $2,840/year
Savings by splitting: $20/year (essentially the same)
In this case, bundling with State Farm is just as good—and simpler. The couple stayed bundled.
Example 3: Small Business Owner in Birmingham
Profile:
- Age 45, three vehicles (two personal, one commercial)
- $420,000 home in Homewood
- One at-fault accident (2 years ago)
- Fair credit (680)
Bundled with Allstate:
- Auto: $2,100/6 months (with bundle discount)
- Home: $3,200/year (with bundle discount)
- Total: $7,400/year
Split Strategy:
- Auto with Nationwide: $1,680/6 months (better accident forgiveness)
- Home with Travelers: $2,650/year (competitive for higher-value homes)
- Total: $6,010/year
Savings by splitting: $1,390/year
The Hidden Costs of Bundling
Beyond price, bundling has potential downsides:
1. You're Locked In
Once bundled, switching becomes harder. If your carrier raises rates on one policy, you risk losing the bundle discount on the other—so you're incentivized to stay even when it's not your best deal.
2. Claims Can Affect Both Policies
File a home claim with a bundled carrier, and it might affect your auto rates too (or vice versa). With split policies, claims stay isolated.
3. You Lose Market Leverage
When your carrier knows you're bundled, they know you're less likely to shop around. That reduces your negotiating power at renewal.
The Hidden Benefits of Bundling
Bundling isn't just about price:
1. Simpler Claims
If you have a car accident in your driveway that damages both your car and your garage, one carrier handles everything. With split policies, you're coordinating between two companies.
2. One Renewal Date
Managing one renewal is easier than tracking two separate policies with different dates.
3. Relationship Leverage
Long-term bundled customers sometimes get better claims service and more flexibility when issues arise.
How to Know Which Is Cheaper for YOU
Stop guessing. Here's how to find out:
Step 1: Get Bundled Quotes
Ask 2-3 carriers for bundled quotes on both auto and home.
Step 2: Get Split Quotes
Ask those same carriers (plus others) for individual auto and home quotes.
Step 3: Do the Math
Compare:
- Best bundled option total cost
- Best split option total cost (best auto carrier + best home carrier)
Step 4: Factor in Convenience
If bundling costs $200/year more but saves you hassle, that might be worth it to you. If splitting saves $800/year, the hassle is probably worth it.
What Independent Agents Do Differently
When you work with an independent agent like TCDS, we run this analysis automatically. We quote you with 10+ carriers and show you:
- Best bundled option
- Best split option
- The exact dollar difference
We don't care which option you choose—we get paid the same either way. We just want you to make an informed decision based on real numbers, not marketing slogans.
Captive agents (State Farm, Allstate, etc.) can only show you their bundle. They can't compare it to splitting between carriers because they only represent one company.
The Bottom Line
Bundling is often—but not always—cheaper.
The only way to know for sure is to compare:
- Multiple bundled quotes from different carriers
- The best split option (best auto + best home from different carriers)
In our experience serving Alabama customers:
- 60% of the time, splitting saves more money
- 30% of the time, bundling saves more money
- 10% of the time, they're within $100/year of each other (choose based on convenience)
Our Recommendation
Get quotes both ways. Then decide.
Don't assume bundling saves money just because the commercials say so. And don't assume splitting is always better either.
Let the actual numbers tell you what's best for your situation.
Ready to Find Out?
We'll quote you with 10+ carriers and show you the best bundled option and the best split option side-by-side.
You'll know exactly what you'd pay either way—and you can make an informed decision based on real data, not marketing.
Get Your Bundled vs. Split Comparison → [blocked]
About TCDS Insurance Agency: We're an independent insurance agency serving Birmingham, Pelham, and Cullman, Alabama. We represent 10+ carriers and have no incentive to push bundling or splitting—we just show you the math and let you decide. Our job is to find you the best coverage at the best price, however that shakes out.