One of the most common questions a client will ask me is whether their insurance premiums will increase if they file an uninsured or underinsured motorist claim on their own insurance.
This becomes an issue when the driver or company at fault in a personal injury case does not have the insurance coverage necessary to fully compensate a person for their injuries and other damages.
Many states have flatly made it illegal to increase your rates for filing a UM or UIM claim on your insurance. However, the reality is that it can affect your premiums by a percentage of up to 10% or even 15%.
Let’s work through this issue: if insurance companies aren’t allowed by law to raise your insurance rates after filing an uninsured motorist claim, why is it that many people believe this to be the case?
Well, insurance companies can try to get around this by deeming you to be an at-risk driver—even if you aren’t a bad driver at all.
Insurance companies assign the price of a policy based on a risk assessment that takes into account multiple factors, including (1) your driving record, (2) your age, (3) the type of car you’re insuring (even the color), (4) where you park your vehicle at night, and (5) how you use the car (daily commuting vs. occasional travel), along with many other factors.
When you have an underinsured motorist accident—even if you didn’t cause the accident—that calculation automatically increases the risk factor associated with your name. Therefore, some insurance companies may increase your premiums in case you are involved in another accident and recoup their monetary losses before they even happen. Generally, these rates will not ever increase after just one uninsured motorist claim.
If you are receiving any insurance rate benefits or discounts from your insurance company for not having an accident for a set period of time, filing an accident claim may result in your insurance company withdrawing said benefits or discounts. However, the sole fact of being involved in a crash in any capacity or filing any type of claim would essentially have the same consequence. This policy change is completely separate and independent from filing a UM/UIM claim. For example, you may lose an “accident-free” discount regardless if you decide to file a UM/UIM claim or not. As, once again, for the simple fact that an accident was reported, your insurance company may remove that specific benefit.
Taking into consideration all of the aforementioned, it is probably more important to ask yourself if you can afford not to file an uninsured motorist claim. Making a UM/UIM claim may be the only way for you to ensure that you can afford all of your necessary medical treatment and not go bankrupt in the process. If you were severely injured in a motor vehicle crash that was caused by the negligence of someone else and that individual is uninsured or perhaps does not have enough liability insurance to cover all of your medical bills, pain and suffering and other damages, then you would need to file a UM/UIM claim in order to recover your losses.
If you’re wanting to talk to the best Little Rock car accident attorney, call us today for a free consultation.