But what if an insurer wouldn't sell you a homeowner's policy unless you also purchased auto insurance from it, too?
- Social Security beneficiaries to get 1.5 percent raise
- Sign up for Baltimore Sun business text alerts
- Consuming Interests blog
- Pictures: Tips to cut down your grocery bill
- How to find bargains
- 10 places (beside the newspaper) to find coupons
See more photos »
See more topics »
The Fayetteville Observer reported early this year that Allstate was canceling the homeowner's policies of nearly 46,000 North Carolina customers because they didn't buy auto insurance from the company, while N.C. Farm Bureau Mutual Insurance was taking similar steps with about 28,000 policyholders.
Another report, in Online Auto Insurance News, revealed that Allstate wasn't renewing about 4,000 homeowners' policies in Arkansas unless those customers also bought auto insurance with the company.
Sometimes called "forced bundling," the practice requires consumers to buy a product or service they don't want in order to get something they do want. It's not new. Consumers for years have complained about such bundling among phone service providers and by cable companies that package unpopular channels with must-see TV.
But now this take-it-or-leave-it bundling is coming to insurance. Maryland is weighing legislation that would ban the practice before it becomes commonplace here.
"We need to insure that consumers have a choice," says Peter Killough, the people's insurance counsel, a consumer advocate within the Maryland attorney general's office. "It's one thing to buy a product and they give you a discount. It's another thing to say, 'If you don't buy our product … you can't have anything from us.'"
Maryland's bill, sponsored by Dels. Tom Hucker of Montgomery County and Mary Ann Love of Anne Arundel County, would prevent an insurer from denying or canceling homeowner's or renter's insurance because the customer doesn't also have auto insurance with the company. Likewise, the insurer wouldn't be able to deny auto coverage to customers who don't buy a homeowner's or renter's policy with the carrier.
Insurers would still be able to offer discounts to customers who voluntarily buy multiple policies from the same company.
It's unclear how much forced bundling goes on in Maryland.
Angie Segal, a business coach from Silver Spring, says it happened to her a few years ago. Another insurer offered auto insurance for half the price she was paying with Allstate. Segal, a long-time Allstate customer, asked her insurer for a rate reduction, adding that without one she would switch to the other company.
She says Allstate told her that she had made a claim on her homeowner's insurance in the previous year, and that if she canceled her auto policy she also would lose coverage on her home.
"I didn't want to go find homeowner's insurance if they would drop me," she says. Allstate raised her deductible, which lowered her premium, but the price was still more than what the other insurer offered, she says.
"I really did feel threatened by Allstate," she says. "It didn't seem fair to me. All I was doing was looking for good rates."
Allstate did not respond to requests for comment.
Insurers notify the Maryland Insurance Administration when they plan to change the terms of who is eligible for coverage.
The agency has identified at least one filing last month from an insurer — Florida-based Merastar Insurance Co. — that would require consumers to buy auto and homeowner's policies if they want coverage, says Vivian Laxton, director of public affairs. The filing is under review, she says.
Laxton adds that the agency, which supports the Maryland legislation, hasn't received consumer complaints about mandated bundling. But the agency has heard from about a dozen consumers complaining of raised deductibles that can be lowered if customers buy multiple lines of insurance from the same carrier, she says.