Car Insurance Piggybacking: Explained Simply

In the car insurance industry, piggybacking is a situation in which a person avoids paying higher costs by carrying several policies all from the same company. Also referred to as multi-line policies, this is a method to reduce the cost of your premiums.

This article discusses the three main types of insurance that you can most commonly piggyback on your auto insurance policy.

Read on to learn all about auto insurance piggybacking and then be sure to enter your zip code above for a FREE car insurance comparison!

How Does Piggybacking Insurance Work?

An insurance company knows it has a lot to lose if it doesn’t sell you multiple insurance policies. They want your business and are usually willing to offer a discount on multiple policies.

The most significant insurance policies today are worker’s compensation insurance, homeowners insurance, standard coverage insurance, extended liability insurance, life and disability insurance, and health insurance.

However, most traditional insurance companies will not offer all of these policies. What you may find is that your car insurance company is willing to provide a policy for life insurance and homeowners insurance for a consolidated low price.

What are other types of car insurance discounts?

The majority of car insurance providers offer a lot of car insurance discounts to their policyholders. These discounts can be for the certain features the policyholder’s car has or for the driver’s driving habits.

You earn discounts for having certain safety features like air bags, anti-lock brakes, a car alarm, and daytime running lights.

Airbag and car alarm discounts can earn a discount of as much as 25 percent. If the car has anti-lock brakes, the policyholder could get a discount for around five percent and daytime running lights can earn a three percent discount. (For more information, read our “Daytime Running Lights Car Insurance Discounts“).

The way the policyholder drives can also earn them excellent discounts. Most insurance providers offer a good driver discount to people that have gone at least five years with no accidents.

This discount can save the policyholder around 25 percent. The driver could also save up to 15 percent if they wear their seatbelt. A policyholder that always wears a seatbelt is less likely to be seriously injured in an accident, so they are considered less of a risk to insure.

Car insurance providers also offer car insurance discounts to policyholders that are members of certain organizations. Most offer a discount to members of the military.

There are also discounts available for federal employees and members of certain organizations.

A policyholder’s loyalty to their insurance provider will also earn them special discounts. If the policyholder has been with the company for at few years, they can get a loyalty discount. There are also discounts for people who have more than one car.

What You Should Know About New Insurance Policies

How can you go about finding this sort of policy if you don’t have access to any special membership options? Try researching national and local insurance companies that offer multi-discount policies.

Obviously, it is a smart idea to start with the insurance company that you already pay on a regular basis. You could look up their official site or ask your agent if the company also offers life or homeowners insurance along with their auto policy.

The next step is to find out how much of a discount they offer. Of course, no insurance company is going to give away such important coverage.

The typical discount for piggybacking is about a five percent discount for a new policy.

Read the contract carefully before agreeing to any new changes, even if the agent explains the deal thoroughly. Sometimes the fine print can differ from what is orally agreed upon.

Another aspect of piggybacking to discuss is multi-driver discounts. A high-risk category driver (such as a teen) may be able to get a substantial discount on car insurance by joining his parents’ policy.

Buying Policies Online

You also have to consider additional factors when it comes to life insurance and health insurance. For example, losing weight or stopping smoking and excessive drinking can reduce your premium rates.

Though it may be hard to save on car insurance when you are young, signing up for a life insurance policy when you are young cansave you a lot of money.

If you need help sorting through various commercial insurance companies, try using our FREE online tool. It’s a great way to compare multiple insurance policies from a variety of popular insurers. Enter your zip code below to get started!

Case Studies: Exploring the Benefits of Piggybacking Car Insurance

Case Study 1: The Smith Family

The Smith family consists of parents, John and Sarah, and their teenage daughter, Emily. When Emily started driving, they faced the challenge of higher insurance rates for teen drivers. Seeking a solution, they contacted their car insurance provider to explore piggybacking options.

By adding Emily to their existing auto insurance policy, the Smiths were able to benefit from a multi-driver discount and reduce their overall insurance costs.

Case Study 2: Homeowners Insurance Bundle

Lisa recently purchased a new house and needed homeowners insurance coverage. Coincidentally, she also needed to renew her auto insurance policy. Rather than obtaining separate policies from different insurance companies, Lisa reached out to her current car insurance provider to inquire about homeowners insurance.

She discovered that by bundling her homeowners and auto insurance policies with the same company, she could secure a discounted rate on both policies.

Case Study 3: Life Insurance Combo

Mark was interested in purchasing a life insurance policy to protect his family’s financial future. During his research, he learned that some car insurance companies offer life insurance coverage as well.

Mark approached his car insurance provider and found that he could obtain a life insurance policy at a reduced premium rate by piggybacking it onto his existing auto insurance policy.