Day 171 | $15,732 paid | $72,981 till freedom
29 / 33 Total Days Biked to Work (88%) | 23 Consecutive Bicycle Commutes to Work
For reasons unknown, I have previously viewed the auto insurance bill as a fixed expense that was simply a fact of life. It was something my parents had set me up with in high school, and I have maintained the status quo on both my provider and level of coverage. Besides, it is common knowledge that males under the age of 25 are considered high-risk and are unable to obtain reasonable insurance premiums. When talks of possibly selling my car began, it opened my eyes to the amount that could be saved on every six-month payment.
Part of the reason I felt like my insurance savings were already “maxed out” was because of all the discounts my Allstate agent listed on my policy. My premium was reduced thanks to the following: Driver Training, Anti-lock Brakes, Good Payer, Anti-Theft, Premier, Multiple Policy, Allstate Easy Pay Plan, Good Driver Rate, Married. I was also enrolled in a program that gave annual $100 reductions on your deductible for staying free of accidents. Finally, on the policy declaration itself, it listed an “Installment” Price and a “Pay in Full” Price. By creating my own monthly installments and funneling money into an online savings account every month, I thought I was being responsible when saving $100 by being able to choose the “pay in full” option. In reality, $100 was chump change when compared with the savings I would find elsewhere.
Reducing the Premium
The first step I tried in reducing my bill was to get some of these discounts that were only applied to the Scion xB on the Honda Civic as well. The only one I was able to get my agent to add on was “anti-theft” for a total premium reduction of $3.82 or a whopping 64 cents a month. This was hardly acceptable, and I then looked to my level of coverage to see where savings could be found. Earlier this year, my coverage was as follows:
Using the “Pay in Full” discount, the total premium came to $1,277.86
What I couldn’t believe was that the premium to cover collision damage to my own car, with a maximum replacement cost of $10,000 had a significantly higher premium than holding liability coverage for up to $100,000. When I really started to consider the costs of replacing a vehicle, I came to an important realization: We don’t need a car to get to work, store, doctor, vet, post office, parks, pharmacy, or any other essential destination. Here I was living within 1.5 miles of everything I need for a comfortable life, with $3,000 in immediately accessible cash and liquid assets, and I’m socking away nearly $1,500 a year for comprehensive/collision damage to our vehicles.
My first move was to remove comprehensive/collision on the Scion xB altogether, and raise the deductible on the Civic as high as my agent would let me. It became immediately clear that my agent did not have best interests in mind, because he reverted into sales mode and began telling me that making such changes were not worth the savings in premium. He said everything short of calling me ignorant, but he went ahead and removed full coverage on the Scion and we agreed to keep the deductible constant on the Honda Civic. This reduced my $1,300 premium to about $900
By this point, my outlook on what we truly needed had shifted and my thoughts naturally arrived at the idea that we no longer had to have two cars in our lives. The previous policy change was hardly in my hands before my brother had agreed to buy the Scion from me. I called Allstate back and told them to remove all coverage on the Scion, and to also remove the “rental reimbursement” coverage from the civic. (If we can bike to work, why would we need a temporary rental car?). This reduced our coverage to $757… but I still wasn’t satisfied.
Although we could function without a car, it sure is nice to have one for inter-city travel. I knew we wouldn’t be able to quickly replace the Civic in the event of a total loss, but it would be reasonable to front a $2,000 deductible. I made the call, and my agent quoted me $499 if we chose to make this new change to the policy. Reaching the end of the line with Allstate, and having no more practical deductions to make, I had to find out what other companies would quote me for an identical level of coverage. When I was able to nail down a quote from Progressive for $316, I signed up within 24 hours and gave Allstate my cancellation notice.
Thus, within a one-month time period our annual auto insurance costs reduced from $2,600 to $600 and we have suddenly found ourselves with and extra $165 to spend EVERY MONTH. This is a significant addition to our monthly debt snowball and is going to help knock this debt out for good!