Bundling your auto insurance with home coverage is generally good practice. Policyholders can save money when they move the other policy with the same insurer. The best part of it is that you have two or three insurers you know well to choose from. You can choose either the home or auto insurer as your final destination for bundling. This gives you a good chance to evaluate them and make the most of possible savings.
For companies it is a good and easy way of gaining more business. Winning the trust of a new applicant is not easy and people like to stick to names they know. The next option is to make the most out of your current policyholders. A sort of upsell opportunity most companies do not want to pass up. In addition, they do not want bundling to go the other way and lose their customer. They want to get in before the competition to eliminate it.
Therefore, they may be eager to sell car insurance when you call for an issue on your home policy or vice versa. They would want to know if you like to receive a quote now or alternatively at your next renewal. They would talk about the possible discounts they can offer and so on. These are all perfectly acceptable practices.
However, there are reports that some companies force bundling on their homeowner policies. One particular company sent letters to their home insurance policyholders warning that they would not renew home policy if they did not get the auto insurance business as well by then.
According to reports this was limited to certain areas where tornadoes and hurricanes are common place. According to experts there may be a good reason behind their actions. The home insurance losses from tornadoes and hurricanes are about ten times larger than car policy claims. Also, people can move or take their vehicles with them following such severe weather warnings. However, homes cannot be taken away to safety.
From the said company’s point of view it may be the only way they can operate profitably in your area with certain disasters looming away. Another sensible approach may be that “either bring the auto insurance over here or we will raise home premiums”.
If the company believes that they are putting their necks out for you by insuring your home at reasonable premium they may feel acceptable to ask you a favor in return. The truth of the matter is that even though they may cancel your home policy as they say at the end they are not really forcing you to buy auto policy from them. The only thing they are forcing is to drop the home coverage otherwise.
Naturally a few people would not be happy to be told what to do. Following complaints some state authorities looked at the situation and some decided not to take any action. The reason being the market for both types of policies is still competitive enough. If policyholders do not like the imposition they can find another insurer and move away.