Make smart vehicle insurance decisions
The economic downturn has inspired people to consider a myriad of creative strategies to save money.
While there is nothing wrong with tightening budgets, it's important that consumers avoid shortsighted decisions that could result in financial devastation
A good example is cutting back or dropping auto insurance.
"As a result of the recession, we're seeing an increase in the number of motorists who are considering lowering their liability limits or, in some cases, even getting rid of comprehensive and collision coverages," said Rich Hawkins, vice president of insurance for AAA Washington.
"No matter how tight your finances get, dropping your auto insurance is one of the worst things you can do," he added.
Uninsured drivers can be assessed legal fees, fines and penalties and have their drivers' licenses suspended. They can be held accountable for the medical bills of other drivers or passengers, as well as property damage.
Industry figures show the average cost to repair a vehicle that has been involved in a crash is $7,000. However, physical injury bills can be hundreds of thousands of dollars.
AAA suggests alternative ways to reduce insurance costs while protecting your financial future. Those suggestions include:
• Increase your deductible. The higher your deductible, the lower your premium.
• Insure your home and car with the same carrier. Companion policy discounts applied to both the auto and home premiums can save money.
• Pay your policy in full. Some carriers offer "paid in full" discounts. Extra administrative fees are often applied to payments when you split your premium into installments.
• Take advantage of good driver discounts. You probably qualify if you have not had any tickets or crashes in the last three to five years.
• Look for a "safe vehicle" car insurance discount. Many car insurers offer discounts for various safety features on your vehicle, including air bags, alarms, factory-installed mechanical seat belts and antilock brakes.
• Shop around and compare rates. If you don't compare rates, you'll never know if you could be paying less.
• Don't pay for coverage you don't need. For example, if you are a AAA member, there is no need to pay extra for towing.
AAA says many people rarely, or never, review their insurance policies.
As a result, those policies don't reflect changes in income and family situation.
"Now, more than ever, consumers need to be mindful of the impact their insurance decisions can have on their financial future," Hawkins said.
AAA Washington has served members and the traveling public since 1904.
The organization provides a variety of benefits including roadside assistance, discounts, maps and personalized trip planning, to its members.
In addition, its full-service travel and insurance agencies provide products and services for members and the public.
For information see AAA.com or call 800-562-2582.
