As personal injury lawyers, one topic that always comes up as a concern to our clients is whether making claims on their own auto insurance will raise their rates.
Here in Pennsylvania, the main thing that will cause your rates to go up is driving dangerously and exposing the insurer to greater than average risk. Dangerous, reckless, or inattentive drivers represent a greater than average risk of the insurance company having to make payouts. The insurer, upon discovering that an individual insured driver represents a greater than average risk of payouts will increase the premiums charged to offset the risk.
The two main ways that your insurance company finds out about dangerous driving habits are your driving record (tickets/”points”) and if you have been at fault in causing an accident[1]. This blog is about what sort of claims you might make against your own insurance and if making any of these claims should raise your auto insurance rate.
Damage to Your Own Car
Unless you have “liability only” coverage, your insurance policy covers you for the costs of damage to your car. Unless you are at fault in causing the damage, presenting a claim for damage to your car should not raise your rates. The insurance company is well aware of the normal risks in the world of other drivers, trees falling on cars, damaging hailstorms, and the like.
The exception here is damage that you cause through your own fault. For example, if you were to drive your car into a telephone pole, that would indicate unsafe driving habits and a larger than average risk of future claims. The insurer would adjust your premiums accordingly.
Medical Bills
Every auto insurance policy sold in Pennsylvania has a minimum of $5,000 in medical benefit attached to it. The idea here is that if you are injured in an auto accident that there ought to be some assurance to first responders and that there will be some money available. Any medical treatment given for injuries sustained in an auto accident must be billed against this $5,000 first.
Even if you have private health insurance, a healthcare provider providing medical services for injuries sustained in an auto accident is required to bill against that $5,000 on your auto policy until it is exhausted.
Just as is the case with damage to your car, unless you yourself caused the auto accident giving rise to the claim for medical benefits, making a claim for medical treatment under your auto policy will not increase your premiums.
Why do I have to submit a claim to my own insurance if someone else is at fault?
People who have been in an auto accident are commonly told to submit medical, auto repair, rental, lost wages, and other claims to their own insurance company. For most drivers, this is confusing, nerve-wracking, and even perceived as irresponsible or dismissive advice.
In reality, it is probably good advice as it will get the driver’s immediate needs for transportation, medical treatment, etc. handled faster. In practice, when you submit a claim to your own insurance for damages you suffered at someone else’s hands, they will pay the claim subject to the limits of the coverage involved and adjusting. Then, they will go after the other driver’s insurance to be paid back. This is a process called intercompany arbitration and it is automatic and handled internally by agreement of the insurance companies.
If you submit a claim to your own insurance for medical damage, or damage done to your car, caused by someone else’s fault it will not raise your rates. You specifically bought insurance in case someone else caused these types of harm to you and the insurance company willingly sold those insurance benefits to you.
When the other party has insurance, your insurer will get their money back through intercompany arbitration anyway.
The Exception to all of this: Bodily Injury Claims
The one common exception to the foregoing is Bodily Injury claims (“BI Claims”).
BI claims are commonly referred to as personal injury claims. These have to be submitted directly to the at-fault driver’s insurance by the injured party. This is usually done by hiring a personal injury attorney to present those claims in a way that maximizes value.
When the at-fault driver has no insurance or not enough insurance to fully compensate the injured driver, the injured driver may then turn back to their own insurance and present an uninsured or underinsured driver claim.
You can read my piece about the menace of uninsured drivers here. Another interesting read on personal injury claims would be my blog on the limited tort scam.
Even if you are at fault, don’t hesitate to submit claims
Premiums rise with risk. Fault tends to indicate risky or inattentive driving behavior. When an insurer becomes aware of this it will adjust premiums upward to reflect that additional risk.
Where a driver is at fault in an accident claims are going to be made against his policy by the other side via intercompany arbitration and or via the presentation of a personal injury claim. The at-fault driver’s premiums are going to be adjusted upward, so it makes no sense to not take advantage of the coverage you have, even if you are at fault.
If you or someone you love has been injured and wants to pursue a personal injury claim, please contact my office or me, directly.
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[1] In a somewhat Orwellian twist, there are some insurance companies that offer a significant discount to drivers whom allow the insurance company to install tracking equipment in their car, so long as that tracking reveals careful driving.
