Penny Wise Pound Foolish

Phew long hiatus.  Haven’t been feeling as motivated to post and research these days, but something happened recently that inspired me to write again.  It’s the concept of being penny wise and pound foolish.  This is a common saying, a cliche even that almost everyone has heard of at one time or another.  I know I have many times in my “youth” without really understanding what it means, but it wasn’t until recently that I really started to take this idea to heart and I had to post about it because as simple as the idea is, it actually created a fundamental shift in the way I prioritize my time and energy.  Recently I received the renewal statement for my Homeowner’s Insurance on my condo.  I noticed that for another year straight my annual premium had risen yet again!  When I first got this insurance, err rather forced to get it back in 2009-2010 when I first purchased my condo I was paying around $500+ a year.  Now I’m being asked to pay $907 for the year.  I was a little peeved, but not peeved enough or motivated enough to look into it at the moment, so I shelved it knowing I had over a month before the due date and in the back of my mind I was thinking “maybe I’ll do some comparison shopping….or maybe I’ll just pay it again for this year and worry about it next year.”   One month later with the due date looming by I pulled out the statement fully ready to pay it and worry about it next year, but got distracted because I decided to first stop by my go to deal site of the moment Dealmoon and I saw BonTon (this random department store?) is having a 20% off sale on Lancome, Estee Lauder, Clinique.  I got excited because I’ve been needing some eye creams, facial serums, lotions and generally I end up paying full price as I’ve gotten wary of buying these brand items off ebay or Amazon which usually offers them at discounted prices but also questionable authenticity.  I recently purchased the Clinique yellow lotion from ebay and while it looks and feels real, it smells like moth balls.  I can’t trust to put that on my face!  So now I’d rather shell out the full price for the guarantee of authenticity rather than save a few bucks, but I still like to wait when I can for some kind of Friends and Family sale.  Anyways, getting back on track here, but sort of to my point you can see I waste a lot of time trying to save a few bucks here and there.  And I spent an inordinate amount of time to purchase these skin care products because I had to make sure I got my ebates/mrrebates cash back (high five if you do this too!), put in all the right coupon codes and had the minimum purchase necessary to get free shipping and qualify for a sample.  After all that I believe BonTon said I saved $45 (plus 2% cash back-score!).  I was excited!  Then I happened to glance over at my Nationwide bill and realized if I had put in even half the time and effort I just put into saving $45 for skin care creams, I probably would’ve saved much more on my homeowners insurance, something I actually NEED (though to be fair I think skin care is pretty essential for women too).   So I decided to carve out a little time and do some comparison shopping online.  I spent probably 15-20 minutes just googling a little to get the lay of the land.  I skimmed through a few articles from recognizable sites (as you know it’s just as important that the information you’re getting is reliable and from a trusted source) regarding best homeowners insurance companies, etc and quickly felt a little overwhelmed.  I decided I just need a quote to see if the rate I’m getting is fair/market value so I could use it as a bargaining tool when I call my insurance agent.  Feeling a little wary of aggregate comparison sites since I’m not familiar with how they work for homeowners insurance (I’ve been burned before, where I filled out a long form and then at the end they wouldn’t just give me the quote but forced me to give my phone number, not this time!) I just picked Progressive, thanks to those nifty commercials and brand recognition, and saw they were willing to give me a quick online quote.  I subsequently had to log into my Nationwide account to find out the details of my current homeowners insurance and input in similar numbers into my quote generator.  All in all, this took another 10 minutes and then Progressive gave me a quote of $764.  Ok cool!  So I can probably save at least a good $100.  Then I proceeded to contact my insurance agent and discuss if there was a cheaper option to my homeowners insurance, planning to use my Progressive quote as my leverage or comparison.  But she brought up that my personal property limit had been increased by the insurance company to $54,000 over the years.  Ok…not sure why this is happening but not too interested and a quick discussion with her reveals that this personal property limit covers the personal items (duh!) in my condo in case of loss, theft, destruction.  Now I live in a high rise building and is manned by a 24-hour security guard so the chances of being burglarized is pretty nil.  The other protection is against fire though, and a fire could happen, not just from us but from our neighbors, but no earthquake protection.  Then I started wondering if we even have $54,000 worth of stuff in our home?  I suppose if I accounted for everything single thing from my kids Step 2 Deluxe Kitchen (currently $209.99 at Target) to my engagement ring (guessing over $10K but under $20K) to my beloved Restoration Hardware St. James Panel Media Console in Antique Grey Wash which I actually paid full price and shelled out over $2000 for (yes still not on sale!  One of the worst feelings ever is to buy something full price and then have it go one sale right after the price adjustment window) then yes, maybe we have about $54,000 worth of stuff, but also considering that in the last 6-7 years I’ve owned this condo I haven’t even filed a claim once, I just decided to roll the dice and lower the personal property limit.   Entire conversation with agent took 7 minutes and 1.5 hours later the agent sent me this email.

I was able to quote two lower personal property limits. I quoted the limit at $30,000 as you mentioned and $40,000, just in case. If we were to lower the limit, I would just need your request in writing, which is fine through this email.

If we lower the personal property limit to $30,000, the annual premium would be $692.00 (savings of $215.00).

If we lower the personal property limit to $40,000, the annual premium would be $774.00 (savings of $133.00).

Please let me know what you think and if you want to process either one of these endorsement.

Guess what I decided to go with?  I went with the lower limit of $30,000 and saved myself $215 for the year in one fell swoop, which paid for my entire skin care purchase from BonTon at full price.  Total time spent: approximately 40 minutes and I saved $215 (after tax money at that!)  Not too shabby.

So what’s the moral of my story here?  Be mindful of where you pinch your pennies and focus on the bigger picture if your time is limited like mine often is.  And be mindful of how you spend your time and energy.  I know if I had put in even more effort and time into researching homeowners insurance over reading reviews for the better eye cream on Sephora (this one is more hydrating!), I probably could’ve saved even more on my insurance.  Now I know researching homeowners insurance is not nearly as fun as shopping for yourself, but in the end it could be a win win because saving a large chunk of money allows you to put away for important things (i.e. retirement, investments, paying off your mortgage faster, finally creating an emergency fund) and you’ll probably have some left over to shop with as well.

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