The benefits of insurance packages:
- The more policies you take out with a single provider, the greater the discount you should be able to secure. Most insurance providers offer group policy discounts, with some up to 20%.
- Less paperwork. Because insurance involves so many different contracts, product disclosure statements and forms to sign, streamlining all your insurance with one provider can cut down on the administration, and make managing your accounts less complicated.
- If you need to make multiple claims, for example if both your home and car are damaged during a break-in, it can be easier to deal with a single provider. This can be especially helpful at a time when your stress levels are likely to be running high.
The disadvantages of insurance packages:
- You may find that a provider has a particularly good deal on one type of insurance, but another of their insurance products is considerably more expensive, even after any multi-policy discount. If this is the case, you could end up paying the same, or even more, than if you had individual policies from different insurers.
- The same goes for service (because the best insurance is not all about the cost). You may find that a provider has top-notch service for one particular insurance category, but falls a little short in other categories. You need to consider whether you want to compromise one good product for one less-than-average product.
- A general rule of thumb for investing is that diversification is a form of protection. That means, should one of your investments go belly up, at least you have options elsewhere. This same theory could potentially come into play with insurance products. If something happens to a provider that you have all your policies with, the impact could be greater than if you held different policies with different providers.