Insurance bundles are different than what most people think of when considering “bundled goods.” In fact some popular TV commercials tend to perpetuate the myth in their warehouse shopping setting.
Here’s what I mean:
Have you ever shopped at one of those warehouse super-savings stores? You know the ones, where you buy ten tubes of toothpaste in one shot. You’ve got enough toothpaste to last a year and you got in at a big discount by taking advantage of bundled purchasing. Congratulations!
But insurance is not some sundry item that you can stockpile in the pantry. You need to choose your insurance bundles wisely and avoid any fluff that some agents tend to throw in.
While it’s true that you can save a good deal of money with an insurance package bundle, it is not because you are saving on stocking and shipping fees, or allowing some warehouse to order in 10X quantities to get their own discount. You save on insurance because it reduces administrative fees and the marketing costs it would otherwise cost the insurance provider to sell that same policy as a “one-off” to a new client. It may also be a type of loyalty reward. In any event, it’s important to know that while you might be able to get the same toothpaste at 50 locations in your area, the same is not true of insurance. So while the discount warehouse analogy is cute and easy to understand, remember that you can save a great deal of money with insurance bundles, such as auto, home and life, but each package should be custom assembled to meet your exact needs.