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How to Keep Your Car Insurance Affordable

7 Tips for Managing Car Insurance Increases

If you have experienced rising car-insurance premiums lately, you’re not alone. The National Association of Insurance Commissioners reports that average auto-insurance spending nationwide outpaced inflation each year during the first part of this decade and shows no signs of slowing down.

Industry observers cite a convergence of factors for the hikes. A healthy economy has more people on the road, and this has been accompanied by an increase in crashes. On the claims side, not only is the cost of medical treatment growing, but so too is the cost of auto repair, thanks in large part to the technological sophistication of today’s vehicles. For example, a bumper on a 2014 Acura sedan might have cost approximately $1,800 to repair. The bumper on a 2016 model of that same vehicle – now equipped with cameras and sensors – might cost $3,600 to repair. And this increased level of technology isn’t relegated to the bumper; you’ll find new, expensive-to-repair equipment throughout most modern vehicles. Even motorists with spotless driving records have seen their premiums rise as insurance carriers try to keep up with mounting claims.

This has a growing number of people looking for ways to reduce their premiums, sometimes at the expense of sound judgment. Here are the top dos and dont’s you should consider to manage your rising auto insurance rates, compliments of AAA Washington Insurance Agency.

1. Don’t: Forget to Take Advantage of Insurance Bundle Savings

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.

2. Don’t: Reduce Your Liability Limits

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.

3. Do: Keep Your Uninsured/Underinsured-Motorist Coverage

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.

4. Don’t: Skip the Personal Injury Protection

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.

5. Do: Consider Higher Deductibles

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.”

6. Do: Weigh the Benefits of Your Collision Coverage

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.

7. Don’t: Miss Out On AAA Member Savings

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.

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Whether you purchase your insurance from AAA Washington Insurance Agency or just need advice from someone you can trust, our insurance professionals are available to answer your questions.

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