A:

The term "multiline insurance" can refer to multiline contracts and multiline insurers, so let's take a look at both variations.

A multiline contract is a type of insurance policy that bundles together exposures to risk and covers them under a single contract with a common aggregate deductible and policy limit. A common multiline contract combines property and casualty risks together into a single policy. A multiline contract is attractive because a common aggregate deductible can be offered on a policy portfolio that covers several risk types. Some insurance companies prefer this policy type because it allows them to reduce risk by spreading it among several factors, which helps them avoid a huge financial burden in the event of a catastrophe.

On the other end of the spectrum, a multiline insurer is an insurance company or independent agent that provides a one-stop shop for businesses or individuals seeking coverage for all of their insurance needs. For example, many large insurers offer individual policies for automobile, homeowner, long-term care, life and health insurance needs.

Holding multiple policies with the same insurer may trigger premium discounts for the insured and allow him or her to consolidate insurance policies with the same carrier. On the other hand, an insurance company that writes multiple insurance contracts on a customer garners more premium profits and improves client retention by keeping competitors away.

For more on this topic, read Insurance 101.

This question was answered by Steven Merkel.

RELATED FAQS
  1. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  2. What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ... Read Answer >>
  3. What is the difference between the death benefit and cash value of an insurance policy?

    Understand the difference between the various components of a life insurance policy including the death benefit and a policy's ... Read Answer >>
  4. Which insurance policies do I really need?

    Your needs for insurance depend on your situation and can't be generalized for everyone, but there are a lot of options available. ... Read Answer >>
Related Articles
  1. Insurance

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  2. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  3. Insurance

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  4. Financial Advisor

    Buying a Life Insurance Policy? Read This First

    Knowing who needs life insurance, how it works and the different types of insurance can help consumers make informed decisions about this product.
  5. Insurance

    Homeowner's Insurance Guide: A Beginner's Overview

    Everything new homeowners need to know about insurance to protect their residence.
  6. Financial Advisor

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
  7. Insurance

    Insurance Coverage: A Business Necessity

    Don't go to work without this policy in place - especially if your work is in your home.
  8. Insurance

    The Dangers Of Stranger-Owned Life Insurance

    Find out how these policies can be used to abuse the system that many people rely on for protection.
RELATED TERMS
  1. Multiline Insurance

    An insurance instrument used to bundle the risk exposures of ...
  2. Insurance

    A contract (policy) in which an individual or entity receives ...
  3. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  4. Cover Note

    A temporary document issued by an insurance company that provides ...
  5. Classified Insurance

    Insurance coverage provided to a policyholder that is considered ...
  6. Insurance Premium

    The amount of money that an individual or business must pay for ...
Hot Definitions
  1. Life Insurance

    A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the ...
  2. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  3. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  4. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
Trading Center