In the last week I’ve gotten pretty peeved at the controls that my state and local governments have put in place to keep me from saving money. The first came when I called my homeowner’s insurance company to increase my deductible. I have enough in savings now to cover all but the largest problems, so I wanted to save some money on my premium. When I called, the agent informed me that my deductible was already as high as my state will allow.
“So, you mean to tell me that the state has decided that I cannot have a deductible above $X amount even though I, not the state, am the one who will be liable for that deductible in the event of a claim?” I asked him.
“Yes, Ma’am,” he said.
He laughed a little bit and then said, “Well, the state wants to make certain that, in an effort to save money, people don’t sign up for a deductible level that they cannot realistically afford. They’ve capped it at a number they feel most people can scrape together, if need be.”
“So let me get this straight. Because there are stupid people out there who, whether from complete ignorance or an intent to deceive, sign up for deductibles they cannot afford, those of us who can really afford a very high deductible are stuck with a lower number and paying the attendant higher insurance rates?”
“That’s about it, Ma’am.”
Well, wow. I hung up with him and thought, “Hmm.” I called my car insurer to find out if the state legislates car insurance deductibles, too. They do, and I’m already at the max with them. I have a feeling this isn’t all the states’ doing. After all, why should they care if I cannot afford my deductible? That’s between me and my insurer. Call me cynical, but I smell a rat. The insurance lobby is one of the most powerful in the world. It’s not out of the realm of possibility that, in order to keep rates high, they went to the state and asked nicely for the deductible limit to be capped at a low number. Even if the state honestly just wants to keep people from taking on deductible levels they cannot afford, I really resent them stepping into what is private business between me and my insurer. However it happened, it stinks for those of us who could really save money if we could get a much higher deductible.
My next peeve came when I figured out that the water company charges me a minimum of $30, no matter how little water I use. We’ve gotten serious around here about conserving water in the last few months. We’ve been collecting rainwater, watching our shower lengths, washing only full loads, and installing some low flow devices. The bills dropped and then stopped at $30. After about four months of exactly $30 bills, I checked the meter. We’d used about 2,000 gallons, but they charged us for 3,000. Smelling a rat, I called the county.
“Oh, if you use less than 3,000, we still bill you for 3,000 gallons. It’s our minimum charge,” said the lady at the water utility.
“So if I go out of town for two weeks and only use 1,500 gallons of water, I still have to pay for 3,000?”
I hung up and growled at the phone. I get it. The utility has costs for treatment plants, etc. to cover. To make sure they cover those expenses, they charge everyone at least 3,000 gallons worth. But I know that I use far less than the average (thanks to the county’s website that lists the average use in my county at 5,500 gallons per month). So there are a lot of people out there that are more than making up for my conservation efforts. Why does minimum billing have to exist? And what’s the incentive (other than being a good global citizen) to conserve water? Heck, I might as well get right up to that 3,000 gallon mark, whether I need it or not, just because I’m paying for it!
I’m sure there are other examples of the government legislating my ability to save money, these just happen to be two that popped up in one week. (Don’t get me started on paying taxes on the interest I earn from simple savings accounts. Yes, technically it’s income, but why not give people some incentive to save money instead of just taking their gains away in taxes? We complain that the banks don’t have money to lend and that people don’t have money to stimulate the economy, but yet we do everything we can to discourage them from saving. Saving without taxing the interest would incentivize people to actually save, thus giving banks more to lend and people more to spend. Like I said, don’t get me started.)
Whether it’s an effort to satisfy a lobby, protect stupid people from themselves, or provide guaranteed operating income, I don’t think it’s fair when the government steps into what is private business (now much of a deductible I have or how much water I choose to use) and then penalizes me for actually making the smarter choice By assuming more of my own insurance expenses I would be lessening the burden on an already overburdened industry. By using less water, I am not putting as much strain on the water system and forcing the building of new plants. I’m trying to help out the system and I’m getting punished. The system would much rather me use enough water to float a boat and to have such a low deductible that all the burden for any accidents or injuries falls on the insurer, not on me. That’s a messed up system.
It’s really no wonder that people don’t want to assume more personal responsibility for their finances. There’s no incentive to do so. If you try to do the right thing you’re likely to find that some government entity will, if not try to outright stop you, prevent your actions from helping you as much as they otherwise could. If you want to save money and be frugal, be prepared to feel like you’re being punished for your smart actions when the government gets involved.