I have too much to say for one response. Apparently there's a max character limit to cap babblers like me... but whatever, here's the 1st of two posts. 0:-)
Eldred,
First of all, congrats on paying down such a tremendous credit card debt! I'm a big proponent of credit cards & cc rewards though and with a little more planning, discipline and financial security, which you're clearly working towards, you should consider cc’s as a part of your financial planning. They have their place.
I agree with others (cut cable), but my primary itch to respond here is regarding your auto insurance situation. PLEASE call to schedule an appointment to meet with your insurance agent to discuss your coverage & needs as it sounds like you need to better understand them.
While I'm not licensed any longer, nor was I ever licensed in MI, I do have insurance background and will throw this out there as MANY people don't understand what they're paying for, or risking, in their selection/omission of coverage.
First of all-- YOUR CREDIT MATTERS. The lower your credit rating, the more you'll pay for your auto and home ins. premiums. Other factors are claims & tickets, as others referenced. Perhaps you need to work on your credit (hence my opinion on the usage of credit cards responsibly, which should help one's credit score). You mentioned that your last ticket was "about" 3 years ago. Three is a magic # for insurance providers, for the # of years they’ll rate you for things. Older than 3 yrs, it 'fall off your record' & you’ll no longer be rated for it. If your current renewal period (6 months) is during that 3 yr anniversary, they may not have stopped rating you for that ticket yet. You can ask if you're being rated for a ticket. (It's slightly possible that they haven't pulled your MVR in 3+ years though which would mean that ticket is a moot point.) They will not change your premium mid-term or before a renewal if a ticket or claim falls off, it will happen at the next renewal.
I would keep your Medical Payments or PIP for a while until you've built up a better emergency cushion, mainly because this will protect you as a pedestrian which I THINK includes as a cyclist, if you're hit. It will help with a health insurance deductible.
RE: when you start cycling to work advise your ins. co. of your new reduced usage, which will lower your rate. They may ask for your odometer reading to compare to in another 6 months to verify you're not lying.
I agree to eliminate, at least temporarily, the $100 charity contribution as you desperately need to start saving for another car, IMO. If you're not prepared in the event you need to replace it, you'll be the one needing charity. (kidding! kind of.) Use all of your additional savings from these tips towards this financial goal. (Yes, air-drying your clothes was a thought I had too, which will add moisture to your indoor air = free humidifier you wanted!)
Actuaries get paid a lot of money for what they do, and while I'm not one of them, I assume your quote for lowering your ins. coverage discovered an increased price (my guess) because statistically they see more claims made by those who carry those lower limits of coverage vs. those who carry a higher limit. Does that make sense? And remember, someone's credit is one of those rate-determining factors. I'm by no means defending this reasoning but if you think from the insurers perspective, they must see a correlation (at least enough to justify the rate differences) between responsible clients who carry more coverage or have higher credit vs. those who have lower limits and/or lower credit.
It sounds like you understand that you'll only get the retail value of your car, less your $1k deductible, so as long as you're fine at paying your current premium level for that difference, then keep the coverage. Yes, part of insurance is selling the warm/fuzzy feeling of being covered but if it seriously helps you sleep better at night, then keep it-- it's up to you to determine a coverage's emotional value: fiscal value. I would always tell folks though, that once your car's retail value drops to approx. $2-3k then you should seriously consider dropping the collision coverage. This is your call, but you'll find more savings with my next suggestion or consideration... (for another reply post)
.....Usually the most significant savings per coverage change in terms of auto insurance is in the "Uninsured/Underinsured Motorist Coverage category"Unfortunately, very little people know the following:
A) What this coverage is even for
B) That it's optional
C) That you can carry
lower UM/UIM limits than your Personal Liability Limits (i.e. Personal Liability and Property Damage Liability of 50/100/50 and UM/UIM 25/50/25)
D) That there is an "Economic Only Uninsured/Underinsured Motorist Coverage" option
E) That both C & D can be combined (by signing off on the selection) for big savings, while still retaining some UM coverage
(Again, I wasn't licensed in Michigan but this is how I explained this coverage to clients while licensed in one of the most expensive states to insure vehicles a few years back. I always found this to be the most logical savings route considering the high number of uninsured drivers on the road in said state.)
A- This needs some background: If another driver were to hit you, you would expect their liability insurance to cover your medical bills, lost wages from work, vehicle repair and pain & suffering, right? Well, if they didn't have insurance, or if they didn't have enough, your UM/UIM comes into play for all but the damage to your car. If you carry matching limits of UM/UIM (matching your liability limits) then it's like you've run into yourself, so to speak, or someone who carries your same limits. Your UM/UIM would come into pay lost wages and medical bills pain & suffering and if you have collision coverage, your deductible of $1000 (as you currently have) would apply. That sucks, but that's the nature of the situation-- you could consider yourself lucky that you carry UM/UIM and Collision in this situation, if injuries were a result.
IF you do not carry collision coverage, you have the option to add UMPD or Uninsured/Underinsured Property Damage coverage. This usually automatically carries a low deductible and is very cheap relative to collision coverage. It would only apply in a specific situation where someone hit you and they didn't have insurance, or a hit & run (low probability=low cost for that coverage, see?) Also, I believe that if you don't carry Rental Car Reimbursement then you would be out of pocket for that in the event of an accident caused by an UM (although if you have family/friends nearby they could help out in this area). Just avoid getting hit by an uninsured driver! :)
B) If you
(and your typical passengers) have good health insurance and a low deductible (or enough cash reserves for your deductible, despite being high or low) then you probably can remove this coverage. This is where an HSA would come into play (not only a tax advantage) that can help you reduce other insurance premiums by having this reserve of funds.
C) If you're not comfortable without UM/UIM coverage, but don't want to carry the same limits as you carry for your personal liability, you can lower the UM/UIM portion. You can take it down to the state minimum and still allow yourself SOME coverage in the event of an uninsured/underinsured driver hitting you or a hit & run. Again, if you decide to drop collision coverage, then you can get the minimum UMPD coverage here as well (obviously go with the minimum UMPD as long as your car's retail is lower).
To illustrate, you can have lower limits with collision coverage or lower limits with UMPD added (if you don't have collision):
Personal Liability & Property Damage Liability - 50/100/50
UM/UIM - 15/30
Comprehensive - $1000 deduct.
Collision - $1000 deduct.
OR
Personal Liability & Property Damage Liability - 50/100/50
UM/UIM/UMPD - 15/30/15 (PD probably has a $500 deductible)
Comprehensive - $1000 deduct.
Remember that the series of numbers represent "Personal Liability per person/total liability per accident/Property Damage Liability" And to disagree with someone earlier who said most state's minimums cover you-- no, as a $15,000 property damage limit, if you plow into the back of a "insert any newer model car" and total it then you would be liable for any cost above and beyond the $15,000 (the 3rd number) or whatever the state minimum is. I know you carry higher PD liability than this, but I'm referencing the 'state minimums' blanket statement earlier. This is why everyone should understand and meet with their insurer.
Now, the biggest savings (apart from dropping this coverage altogether, of course):
D) You can carry lower UM/UIM limits than your personal liability coverage, as stated in C, AND choose to have it pay for economic losses only. After all, this coverage is for you and your passengers and is completely optional in the first place, why couldn't you customize it? This option is called "
Economic Only Uninsured Motorist Coverage"
This essentially means that if you were hit and injured by an UN/UIM driver (or a hit & run) then you are not going to ask for pain & suffering from your own insurance policy. It will pay for economic losses which are costs that can be proven. You can produce a hospital or rehab bill and pay stubs for lost wages while out of work due to the accident for example. The vehicle repair or replacement comes from either your collision coverage, or your UMPD coverage if you selected it.
Considering this is a major thing to 'opt-out' of (pain & suffering) you have to sign a waiver. Some companies allow you to sign it electronically now, but it used to be initial and sign in person. This little extra step though, if you don't want to exclude the coverage completely, will usually save you HALF of the premium of regular UM/UIM (whether you choose matching limits or not).
This is a huge savings worth considering for those who have a good reserve and especially if you have disability insurance through your employer or otherwise. It is important though to have a one-on-one in person meeting with your insurance agent and understand what you need in your specific situation though. I can't stress that enough. Everyone's needs are different, I'm simply trying to point out that there are savings to be had, that usually aren't known to be available.
Other Considerations to Save on your Insurance:-Ask if your provider offers discounts for any organizations or alumni affiliation you have. Sometimes 10% just for having a BS degree, being an EMT/Firefighter or being employed at XYZ company, there are some crazy ones but it proves that there are discounts out there for a lot of people, just ask! (Note: the employment part may be tied to a specific insurer, ask your HR dept.)
-As you age discounts-- I think it's 55> but it may be 65. At a certain age, you can usually take a defensive driving course and get a discount for "x" years. Look up AARP courses that will pay for themselves with the savings they'll give you. Be sure to ask about this from your ins. company before taking it, because you have a couple years.
-Shop around to see if your home & auto insurance can be with the same company for a bigger discount. I'm not clear on your situation, so be sure to check when you're shopping rates for each. This could equal hundreds in savings annually!
-If you do find a different house/apartment, call your provider and ask them if that zip code will cost you more in auto insurance than you're already paying. A "Garaging address" as it's termed has statistics in and of itself (see why actuaries get paid so much).
-While shopping for a different car you can search the IIHS (Insurance Institute for Highway Safety)
http://www.iihs.org/iihs/ratings to find the safest rated cars which should mean lower rates on insurance (always get a quote first though).
-Home insurance, do you have a fire extinguisher? Do you have a hip roof? Are you getting a discount for it? There are several factors that you should review on your homeowner's insurance side too.
I'm happy to clarify anything, but you should ultimately talk with your insurance provider to get the facts for your policy and your state's current options/requirements (it’s been a couple of years since I've been licensed).
I hope this helped..if anyone else reads it. 0:-)