How 2 Phone Calls Saved $800

Published July 20th, 2008

This is a tale of two phone calls…and over $800.  This whole ball of yarn all started to unravel when I entertained the thought of finally moving on to the next stage in my career, and needed to do my annual personal finance re-evaluation and adjustment (you can read more about this in When Career Plans Change, and then the update on what happend respectively).

My definition of what it means to be frugal is centered around value.  I try hard to get the most out of the money we have available for home and discretionary spending, while having an excellent quality of life, and paying back a large loan from our education.  Most days I do very well.  Some days are excellent!  Today I’m going to tell you about a couple of those excellent days:

Phone call number one–the satellite provider

My roommates and I lived for many years through university without cable, relying on a decent antenna to get reception for the few channels we wanted to watch.  One year, I had a couple of tenants that really wanted cable, so I pitched-in to split it, but never cared too much about having it. 

The only time I’ve voluntarily signed up for the extra channels was three years ago, when my husband went away to England for teacher’s college, and the dogs and I would be living alone in a far-away country apartment while our house was being built.  Of course I’d shopped around, and agreed to a two-year contract for a fixed rate including receiver rental and taxes for $25 a month.  This was fine with me.  Fast-forward two years; the contract ends.  We now watched more TV than we used to, but the contract period was over, and I saw the rate gradually creeping up by a couple of dollars a month. This really annoyed me. 

One day, about 8 months after the contract period ended, I got a bill for almost $42, and I snapped–a $17 increase a month (or 68%) was just too much for the value-finder in me to accept.  We decided that we refused to be the victims of the satellite company trying to recoup the profits from our two years of fixed rate.  We had a serious talk about whether we really needed this expense, what alternatives we have to watch the few shows we like, and decided it was time to make a phone call to get a better rate–accepting fully that I might have to walk away (if I could just get HBO in my part of Canada, maybe I’d be telling a different story…but I digress).

So I called the service provider, and told them I’d noticed a 68% increase over the last 8 months, and that it’s not acceptable–we enjoy the programming, but it’s just not essential to our lives, so I’d like to cancel.  The agent began to quiz me about my needs, told me he doesn’t think that’s necessary, and how valued I am.  Then he offered me a 20% reduction on the “programming” part of my bill.  What does this amount to? About three dollars a month after tax.  Of course, he refused to acknowledge this, he just kept saying,  “…but I’m giving you 20% off here because you’re a valued customer”.  I told him that’s only a couple of dollars a month, and when the rates keep increasing, it won’t help me.  His reply was “…just keep calling back every few months, and I’ll see if we can give you another discount–I’m making you a great offer, and you should take advantage of it.”  I said I’d only consider staying if he could offer me another fixed rate plan to guarantee against these increases.  His reply:  “Those are only for new customers.”  Then I thanked him and said I would like to cancel my service.  In a last ditch attempt, he warned me, “Well, if you sign up again in the future there will be a $50 installation fee–just so you know.”  I thanked him again and hung up the phone.  And smiled.  Now I really didn’t want to give them my $42+ a month ($504/year)–I had bigger plans for it!

I’m happy to say that a couple of months has gone by with no TV, and we’re better than happy.  The one thing I always hated was the commercials.  Now I can watch whatever episode of show I choose on DVD from my friends and family, or online for free–minus most of those pesky commercials!  Some of the television networks were very smart when they decided to setup the shows for their viewers online.  Sometimes it’s a couple of days before I can watch a new episode, but I don’t mind at all.  Most importantly, we feel like there’s so much more space in our lives without the TV on.  I’ve actually had time to do more reading, and we enjoy each other’s company even more than before–can’t put a price on that!

Phone call number two-the insurance broker

My family has been with the same insurance brokerage for home and auto for several years–maybe about 20.  I’d heard about increasing the deductible and reducing the premium a few years ago, but had other things on my mind, and was just happy with the annual premium decrease I’d get for being a good driver.  Enter the wedding, the house, and my husband’s car all on one bill, and now I was starting to pay closer attention. 

Last year, I confidently told the broker that I’m in a position where I could afford a higher deductible should something happen, so I’d like to increase the deductible and lower the premium (I should also say that the brokerage had changed hands and the insurance companies they dealt with changed around this time too).  The broker politely said that upping the deductibles from $500 to $1000 would be our best savings.  I pushed a little about a higher deductible, and she confided in me that “it wouldn’t make a difference”.  So last year I was happy about a further reduction, but that little voice inside of my head was still a bit uneasy.

Fast-forward to last week.  Things were crazy, crazy busy around here, and I honestly hadn’t had time to shop around and read the fine print for other companies and brokers.  The annual insurance renewal was up in a week, and I knew I needed to get on the horn to lower the premiums–this year I wasn’t going to be talked down.  So I made a call, telling the broker we knew this insurance company’s premiums were higher than some other companies, but we really value her customer service and want to stay with them, so we’d need to up the deductible to make-up for some of this.  The thought of my leaving, and thinking I’d done all of my homework, made her sit up and pay attention.

I started off by requesting a $5000 deductible.  She looked in her book and said that apparently this particular carrier doesn’t do that for customers in good standing (the $5000 deductible is only for those with a lot of accidents so they could still afford a reasonable premium)–the most we could do was up it to $2000, but it was only worth it for the house, saving me $50 a year.  I pressed about the car, and her reply was, “Oh you’ve got the best discount, it won’t make a difference, you’re only talking a few dollars a year”.  I pressed her exactly three times for a number before she gave in….to the tune of an additional savings of $150 a year.  More than a few dollars in my book.

Add up the annual rate reduction over last year and the $200 in savings from my phone call, and I get an extra $334 off of my home and auto bill.  Not bad, considering in this case I really hadn’t had the time to do detailed shopping-around, and I actually value the service of having a broker that will advocate for me in case of an accident.  Over the years, members of my family have had to make a couple of claims, and the customer service has always been quite good.  Next year, I will have time to do all my homework, and actually entertain the thought of a new insurance company and broker for further savings–until then I’m quite happy.

So what did I do with the extra money?

I put it together, and I got $838 dollars.   Not bad for 20 minutes of my time. I topped it up a bit, and upped my RRSP (retirement plan) contribution by an additional $75 a month–of which I’ll get some income tax savings.

I know these agents were just trying to do their jobs, and there are certain things they’re expected to say so the companies they work for don’t lose money, but I was able to politely still get what I wanted in the end.  I feel really good about putting that money to better use right now–specially since it will grow tax-free over the next 25 years!

If you’re looking for ways to negotiate savings on really big ticket items like your wedding or mortgage, you might also want to check out 5 Things You Never Thought Were Negotiable for some great tips, and the overall strategy that I use for those types of purchases.

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