Bill – Frugal Living

Adjusting Auto Insurance

September 9, 2015 by Andrew Leave a Comment

Yesterday the auto insurance bill came in the mail. It is one of only a handful of bills that is not auto paid in our house. The reasoning is pretty simple. First off, it is not a monthly bill but a semi annual bill. Secondly, it is wise to reevaluate the type and amount of coverage from time to time.

Our 2006 Pontiac G6 is getting close to the 10 year old mark so we were looking to drop certain coverages.

Comprehensive

One of the easiest changes we made (in my opinion) was dropping comprehensive coverage with a thousand dollar deductible. Comprehensive covers damages to your car from wind, hail, flood, fire, theft, vandalism, or hitting an animal. By keeping our car stored in a locked garage and driving predominantly in town, most of these events are unlikely to happen.

Savings: $24

Liability

In Illinois, motorists are required by law to have insurance and they are required to carry at least 25/50 liability. What does that mean though? 25/50 coverage means that in the event of an accident, a single occupant of the other vehicle is covered for 25 thousand worth of expenses. The second number, 50, means that if more than one person is injured in the second vehicle then the insurance will pay out up to 50 thousand. Liability insurance protects you from having to pay the other party for damages they received because of an accident involving your car. While the minimums sound high, they really aren’t. If you consider the cost of medical treatment and legal battles a small fender bender could easily blow past the minimums in no time.

The general rule of thumb is to carry enough liability coverage to cover your net assets. The last thing you want is to have a lien placed on your house or your wages garnished to pay the helivac bill of someone else.

We increased our liability from 100/300 to 250/500.

Cost: $14

Medical Payments

Medical payments cover your own hospital expenses. One of the nice things about auto medical versus your personal health insurance is that auto medical will pay out for accident related injuries up to three years after the incident. We increased our medical coverage from 5000 to 25000.

Cost: $11

Collision

Our existing policy had a $1000 deductible collision coverage and even though it made up 1/3 of our total bill we decided to keep it. The math did not work out to increase the deductible to 2000 or to drop it entirely. Assuming our car has a fair market value of five thousand dollars, it would take 100 years of no accidents at the higher deductible/lower premium to pay the 1000 dollar difference. Dropping coverage completely would save us $450 assuming we had no accidents for the next five years. A single fender bender would likely cost over $1k in repairs. Perhaps in a couple more years when the car has depreciated more we will drop collision.

Change: $0

In Summary

Our semi annual premiums will increase by $1.23. We have less coverage to cover damage to our car, but quite a bit more to cover personal medical bills and to protect our nest eggs from lawsuits. There is a saying that I read somewhere on the internet, “young people are underinsured, old people are overinsured”. Insurance of all kinds is a gamble and it is helpful to reevaluate what kinds you need and how much as your life circumstances change.

Negotiate a Lower Cable/Internet Bill

December 3, 2013 by Andrew 2 Comments

Ahh the cable bill. If ever there was a archetypical love/hate relationship between the American household and a service provider then this has to be it. On the one hand, people love tv, and internet connectivity has become almost an essential utility (especially for the younger generations). However, people hate the prices that they pay for these services. If you want to see what I’m talking about, check out the Consumerists annual “Worst Company in America“. Comcast, Time Warner, Direct TV, Dish, Cablevision, AT&T, and Verizon make regular appearances and often fare quite well (err, bad) in the bracketed tournament of hated companies.

I would consider us lucky because where we live we actually have a choice between two internet providers, Comcast and Frontier. Back when we rented an apartment, we used Frontier and paid about $42/mo (after all the taxes and fees) for a 7 Mbps internet connection. Mbps stands for mega bits per second and shouldn’t be confused with MBps (mega Bytes per second). Generally, whenever you see internet speeds folks are talking about bits. There are 8 bits in a byte so a 8 Mbps is the same as 1 MBps. Confused? Good, let’s move on.

When we moved into our house 6 months ago we decided to try out Comcast’s internet only service. Comcast frequently runs promotions for new customers where you pay a set rate for the first 6 months of service and then they jack up that rate for the next 6 months and then you end up paying the ‘retail’ rate from then on. You are free to cancel at any time so I figured I’d give it a go. Our promo deal was for a 25 Mbps connection for $30, then it would bump up to $50, and finally to $65.

November was our first month at the $50 level and I already knew what I was going to do back when I signed up. I called Comcast to negotiate a lower rate. 20SomethingFinance.com has a nice how to that I roughly followed. There were a few differences and some omissions that I think merit some discussion.

Before calling, do your homework and see what other companies are offering, this is extremely important!
After dialing the number, the menu options are a bit different than what he has listed so don’t blindly hit #4 followed by #2 or you may end up ordering “Chairs, Rails, & Extreme Wrestling Pay per View”.
After getting a retention/cancellation rep they will ask for your account details, address etc. It will seem like they are going to happily cancel your services without even giving you a chance to negotiate. Don’t worry, we’ll get to that in a second, just stay calm and confident.
Finally, after verifying your account the rep will drop a short little line like “why are you leaving?” That’s your cue!
Explain the fantastic deal the competition is offering and make sure to stress that your current bill is too high. If there is no competition in your area, they probably know and you’ll need to get creative.
Be patient and friendly, especially if they put you on hold.
If you get a counter offer, make sure you understand it. If you don’t like it, either try calling again or cancel your service. This is where doing your homework before hand pays off.

I looked up Frontier’s rates and they had indeed changed from our renter days.

$30 – 6 Mbps

$40 – 12 Mbps

$50 – 24 Mbps

The Comcast rep offered me a 50 Mbps connection good for the next 6 months for $35/mo, a credit for this month, and access to streampix, Comcast’s (weak) version of Netflix. Yes sirree. Sign me up. Amount saved over the next 6 months by making one simple phone call, $90. Time spent on phone, 9 minutes. Internet speed twice as fast, cherry on top.