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Bundling helps New Jersey family save money on car insurance

Lori Johnston

When you live in an area with high insurance rates, saving even a little money can ease the pain.

Here’s how one family in New Jersey, which a CNBC study found had the sixth highest cost of living among all the states, has discovered ways to save money.

Who: Sam Carchidi, the Philadelphia Flyers hockey writer for the Philadelphia Inquirer. He lives in the New Jersey suburb of Wenonah.

Why seeking savings: Insurance rates contribute to a high cost of living in New Jersey – a cost living that’s causing some folks to flee the state. Carchidi has seen people move to North Carolina and South Carolina for a more affordable lifestyle.

“Between property taxes and car insurance, it’s really bad here,” he says.

In a recent study of insurance rates by state, New Jersey landed at No. 15 in terms of states with the highest burdens for car insurance costs. The median price of an annual car insurance policy in New Jersey is $2,556, with about 3 percent of median household income going toward car insurance.

The study found that North Carolina is the second most affordable state for car insurance, with residents paying 1.63 percent of their median household income for coverage.

How much saved: At least $1,000 over the years. More importantly, his rates haven’t increased excessively, even as his children became drivers and joined his policy and even as they have purchased different vehicles. The cost of car insurance can be a huge burden, Carchidi says.

“I think that’s one of the reasons why people are moving out of New Jersey – because of high insurance rates and high property taxes,” he says. “The car insurance and the property taxes make people wonder if it’s worth it sometimes.”

How he saved it: Carchidi bundled his car insurance with his homeowner’s insurance through Encompass Insurance. “When you get the homeowner’s coverage, they lower the car insurance,” he says. “The more things you have insured, the better rates they can give you.”

The Encompass One Policy combines homeowner’s and car insurance – with one deductible, one premium, one annual bill and one independent agent. Carchidi’s agent, Carl Luzi at Luzi Insurance Services in New Jersey, identified the policy for him.

Carchidi’s homeowner’s policy includes coverage for his primary residence in Wenonah and a second home on the Jersey Shore. His car insurance covers four cars.

The breakdown of his annual premium of $6,983 looks like this:

  •     $1,471: Toyota Venza (his car).
  •     $1,465: Mini Cooper (wife’s car).
  •     $1,332: Toyota Highlander (son’s car).
  •     $1,248: Toyota Corolla (daughter’s car).
  •     $1,227: Homeowner’s policies for both homes.
  •     $240: Umbrella policy for vacation home on the Jersey Shore. This provides liability coverage beyond the limits of the homeowner’s policy in case a home-related lawsuit is filed. The family rents out the home.       

The expert says: Many insurers offer discounts for bundling policies, just like how telecommunications company package cable, TV and Internet at a lower cost than buying them separately. Encompass Insurance is part of Allstate Insurance Co., which estimates combining homeowners and auto insurance policies can save up to 10 percent on auto insurance and up to 35 percent on homeowner’s insurance.

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