Sustainable Personal Finance

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Like many people out there I had not given our home and automobile insurance coverage a second thought. When I bought my first car I used a local brokerage that has a good reputation in town. Each year the policy would be renewed and I never looked for a better deal as I blindly and happily continued to “buy local” so to speak. When I bought my first house I called up the brokerage and had them cover my home insurance and I was happy to hear I got a discount on both the home and car insurance due to using the same company for coverage. My broker assured me that this was the best deal I could get and I believed the broker.

How wrong and silly was I. Naive even.

In the summer of 2010 we were moving to a new house and were buying our new Subaru Outback. I needed to make changes to our policies so once again I called up the broker to start the process of opening new policies on the new car and home and closing the old policies. Once again I was assured that Aviva (previously) Pilot was my best option. The first topic of discussion was our new car insurance. I was roughly quoted about $120 per month. Being a new car it seemed to make sense that I had been paying about $90 a month on our 8 year old car. The conversation then moved to our new house. This is where I learned a VERY valuable lesson. If they don’t ask, don’t tell! Why is this? We bought a 100 year old house that has a boiler furnace and the old style metal radiators. The pipes in the basement that carry the hot water are insulated with well wrapped asbestos (which when well wrapped and left undisturbed is harmless). Silly me, I told the broker this. She said she had to contact Aviva and would get back to me. Our home inspector had stated he saw no issue with the condition of the pipe wrapping so I wasn’t too concerned. A few days later the broker called me and told me that I could get coverage (for $108 a month) but I had to have the asbestos wrapping removed in 60 days or my insurance would be revoked. I was floored not to mentioned annoyed and perturbed at the thought I would need to shell out about $8000 to safely remove the wrappings.

This is when I decided to assess our insurance provider. The thought came to me that this brokerage must make money to survive. Were our monthly payments keeping them afloat? Most assuredly. I decided that I wasn’t overly happy with our new broker (the initial fellow was promoted and no longer managing our file) who worked part time and was very surly in her communications. So the time was right to hunt for the best rate. The first thing I realized is that I don’t need to pay for someone to be available for face-to-face discussions. I would always call or email the broker, so why pay their building lease and office costs too? I went over to the redflagdeals.com forums and discovered an insurance brokerage called TD Insurance Meloche Monnex which was getting great reviews for the cost of their insurance and their service. So I gave them a call. The rep was pleasant and worked to find us a good rate which included a discount for having both home and auto insurance through them. Check out the difference in price using an online/call centre service versus the local option.

Wow! $804 a year?!? 29.4%. That is a significant savings.

I am now referring my family and friends to this TD service. My Dad made the switch and is reporting that their monthly insurance premiums (house, cars) were reduced from $331 to $208 or $1476 annually - a 37.1% saving (they have 2 vehicles). He is ecstatic and I am happy to have helped. I will tell my Mom about this soon as well. As our parents near retirement age and lower income they can use as much savings that they can discover and we’re happy to make them aware of our frugal discoveries. Some may ask whether or not abandoning our local brokerage is in line with our financial and lifestyle philosophy. We always prefer to buy local, when it makes financial sense. In this case, the local option is not sustainable for our personal finance.