If you don’t already get your auto and homeowner’s coverage from the same carrier, ask your agent how you might benefit from insurance bundle savings.
Washington’s minimum liability limits—$25,000 per person and $50,000 per crash for injuries, plus $10,000 for property damage—were established in 1980, when the costs of medical treatment and auto repair were much lower than they are today. Insurance carriers that promise to save you money often do so by reducing your liability limits, which is not a good idea. A person deemed responsible for a crash is on the hook for damages exceeding their liability limits. Considering that the average price of just a small new car today, according to Kelly Blue Book, is $20,000, the gap between the liability limit and total judgment for a person insured at or near the state’s minimum levels could add up fast.
If your car is damaged or you are injured in a crash caused by a driver with low liability limits, the other person’s insurance policy might not cover all your expenses. This is where your uninsured / underinsured-motorist (UM/UIM) coverage would kick in, paying you the difference between the other person’s liability limits and your total expenses. As auto insurance premiums continue to rise, it figures that many drivers may decide to lower their liability limits, and this form of coverage will become more important than ever. UI/UIM coverage is not a Washington State insurance requirement, but your insurance agent is required to offer it at the inception of your policy. If you previously declined it, you can add it to your policy. It typically increases your premiums by about 15 percent.
Personal injury protection (PIP), which adds about 5 percent to your premiums, is another option worth keeping as part of your auto insurance policy, even though it is not a Washington State insurance requirement. It provides coverage for such things as medical bills and income loss (up to set limits) right after a crash, regardless of fault, for both you and your passengers. PIP can also help fill certain critical gaps in your health insurance plan; cosmetic dental injuries and medical airlifts, for example.
A low deductible keeps a little more money in your pocket if you ever have to file a claim, but raising your deductible reduces your premiums—without lowering the liability limits you need for the “big stuff.”
If you drive a vehicle with a low book value, such as an older car, your cost for comprehensive and collision coverage might exceed the potential value of a claim within a few years. If this is the case, it might make sense to drop this element of your auto insurance policy.
Did you know that AAA Washington’s insurance carrier partners offer members a 5 percent discount on car insurance rates? While we can’t guarantee the cheapest insurance rate, we can provide members with the best value for your dollar.
AAA Washington Insurance agents are here to help. Whether you’re ready to buy, need an insurance review or simply have questions, we’re your one-stop shop. Call (877) 222-4678 for a free, no-obligation consultation.