What Is a Combination Policy?

Mary McMahon
Mary McMahon

A combination policy mixes aspects of different insurance products to suit the needs of the customer. The exact composition of such policies can depend on the offerings at an insurance company and the expressed needs of the client. Sometimes it is possible to receive a discount for buying insurance in combination. This can make mixed insurance products more affordable to customers who may not be able to buy them separately.

Man climbing a rope
Man climbing a rope

One type of combination policy, which is no longer widely used, mixes coverage from two different insurers. Such policies were particularly common for vehicles in eras when there were limits on the kind of insurance different firms could offer. To confirm that customers had all the necessary coverage, insurance companies might team up to sell mixed policies, with insurance from multiple providers to offer complete coverage. This example is rare thanks to changes in insurance regulations.

Another example, most commonly seen with life insurance, allows customers to mix and match products from the same lineup at a company to tailor their coverage. This combination policy might blend, for example, income protection and a life insurance payout to provide in the event of death or disability. Separately, these products might be expensive, but combined, they can offer sufficient coverage at an affordable price. An insurance agent can work with the customers to determine the most appropriate blend of features.

Insurers may also offer combination policy in the form of insurance packages for multiple needs. Homeowners, for example, could buy home insurance and car insurance as part of a package. They might also be able to add on life insurance. Separate policies might be expensive and time-consuming to administer, while the package combines them all for convenience. This type of combination policy can offer various benefits for customers, including special pricing for people who qualify through senior discount and other programs.

People seeking insurance products may want to outline all their needs for an agent, and research their options thoroughly. Sometimes combination insurance can offer the best coverage at the best price. In other instances, it may be necessary to purchase various insurance products separately to get the right coverage. Insurance agents can provide no obligation quotes to allow customers to learn about pricing and services offered. It is important to read the documentation carefully to determine what kind of coverage is being offered, what might be excluded, and how the insurance agency calculates premiums and deductibles.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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