With inflation rates expected to remain higher than average this year, many consumers are focused on reducing expenses. One place they may seek savings is in insurance costs. Agents experience this on a regular basis when customers compare premiums between auto and homeowners carriers. 

But is price-shopping the best way to approach insurance coverage? Not necessarily. It might appear to shave a few dollars off insurance premiums, but other options may serve customers better. Bundled and package policies, for example, offer a chance for agents to promote their added value as insurance experts and increase retention.

Switching from a monoline policy to a bundled or a package policy can be done at any point during the term of a policy but may be most timely when a monoline policy's premium increases. Most insurance carriers offer to bundle two policies, but others offer true package policies. Although bundled and package policies seem similar on the surface, they are different.

Bundling coverage allows a customer to place their auto and homeowners policy with one insurance carrier for a discount. This is often a better deal than placing separate policies with multiple carriers.

With bundling, the two policies remain separate, but the advantage is that one carrier handles both coverages. This can prove beneficial should there be a claim and can save customers compared to the cost of purchasing or renewing two separate monoline policies.

A package offers multiple lines of coverage under one policy. An advantage is that it treats customers—who don't perceive themselves to face multiple risks—holistically. A customer has just one policy, one policy number, one effective date, one bill and, potentially, one deductible if a loss were to occur that damages their home and auto at the same time.

While package policies are specific to each carrier, an insured can expect a better discount than bundling.

Package policies also can offer agents better retention outcomes. With multiple lines of coverage under one policy and one combined premium, the impact of a rate increase on one specific line is often offset by the stability of the other lines of coverage in the package. This helps reduce shopping triggers for customers who are often driven by price sensitivity.

By providing customers bundling and package policy options, agents emphasize their value as insurance experts, increasing customer satisfaction and retention.

Steve Butler is the personal lines product management and underwriting practices leader at Westfield Insurance.