Why Auto Insurers Love Homeowners

Auto insurance companies hate claims.

It's no surprise, then, that insurance companies love homeowners, who file auto insurance claims markedly less frequently than drivers who rent or live with their parents.

According to a new analysis of data from more than 700,000 adult drivers who disclosed past auto insurance claims as they compared car insurance quotes at Insurance.com:
  • 14.3% of homeowners (single-family, condo and multifamily dwellings) had at least one car insurance claim in the past three years.
  • 16.8% of renters had a claim.
  • 22.2% of drivers who live with their parents had filed a claim.

It's not just about younger drivers versus older drivers. The pattern of more claims among renters and those who live with parents persists across every age group well into middle age, the data show. (See claims rates by age group and residence type.)

The data include claims of all kinds: collision, comprehensive, liability and uninsured motorist.

Bundle up: The savings can be big

Rather than penalizing those who rent or those who live with parents, insurance companies tend to reward homeowners instead. Most auto insurance companies will offer a small discount simply for owning a home or condo, says Penny Gusner, consumer analyst with Insure.com.

But a bigger discount can come from bundling your home and auto insurance policies with the same company. “In some cases this may be the biggest price break available to you,” Gusner says. “But it also doesn't mean you might not find a better price buying the policies individually.”

According to J.D. Power and Associates, 58 percent of consumers bundle their home and auto policies.

Nationally, according to data compiled Quadrant Information Services for Insurance.com, savings from bundling home and auto policies with a single insurer averaged about 8 percent but went as high as 14 percent in some states.

Renters get a smaller but still substantial bundling discount, the Quadrant data show, averaging about 5 percent.

Top car insurance discounts by percentage savings of total premium
  • Marriage: 11.3%
  • Homeowners policy: 7.7%
  • Condo policy: 6.2%
  • Good student : 5.3%
  • Renters policy: 4.9%     

But drivers who write a single check for the home and auto insurance shouldn't lose sight of what they are paying for each. Auto insurance rates can vary between companies by hundreds of dollars, sometimes thousands, and that might outweigh any bundling discount.