Understanding Uninsured Motorist Claims and How They Impact Your Auto Insurance Coverage
We’ve covered information about uninsured and underinsured motorist claims in the past, but have not discussed how it can impact your insurance premiums.
What is an Uninsured (or Underinsured) Motorist Claim?
An uninsured motorist claim is a type of insurance claim that arises when an insured driver is involved in an accident with an uninsured motor vehicle or driver. This type of claim can be used to cover costs associated with medical bills, lost wages, and property damage. This type of coverage is carried on a driver’s insurance policy and provides bodily injury coverage and property damage coverage when accidents occur with uninsured drivers. It is important to understand the legal implications of filing a claim with this type of collision coverage as well as the insurance rating process that will be used to determine coverage levels. With this knowledge, one can better prepare for any potential uninsured motorist claims in the future.
This same coverage also covers underinsurance motorists, that is, motorists who have insurance but whose policy limits or liability coverage are not sufficient to cover medical expenses incurred due to injuries or property damage resulting from the accident.
How Does an Uninsured Motorist Coverage Claim Affect Your Car Insurance Coverage?
Uninsured motorist claims can, in some cases, cause your insurance premiums to increase. The circumstances and factors surrounding why this happens can vary from case to case and also varies between insurance companies. Progressive and GEICO have the highest average increases for not-at-fault accidents, which includes uninsured motorist claims (a 16.6% increase and a 14.1% increase, respectively), while Allstate and State Farm have the lowest (a 4.8% and no increase at all, respectively). Uninsured motorist claims are more likely to cause an increase in premiums if there is no at-fault driver (e.g., a hit-and-run).
If you do file an uninsured motorist claim and your insurance carrier decides to increase your rates, you can speak with their underwriters to explain what happened and see if they can avoid increasing your rates. Alternatively, you can look for new insurance carriers and ask if they have a policy of increasing rates for uninsured or underinsured motorist claims.
The Pros and Cons of Filing Uninsured Motorist Claims
Filing claims for uninsured and underinsured coverage is usually the best course of action if there is a significant difference between the coverage (or lack of coverage) or the other driver and the total cost of your medical bills, lost wages, property damage, and other factors. If your insurance company has a policy of not raising rates for uninsured motorist claims or not-at-fault claims, it probably makes sense to file a claim. If there are no injuries and minimum damage (e.g., another driver dents your door when opening their door and leaves the scene), you may want to consider the increase in your insurance rates compared to the cost of repairing damage to the vehicle. Similarly, if the deductible for filing a claim is close to the value of the damages, going through with the claims process may not be worthwhile. However, always keep in mind that you have been paying for UM/UIM benefits, so if you have a need to use those provisions of your policy, you should use the benefit you have been paying for.
How Can You Protect Yourself from the Financial Impact of an Uninsured Motorist Claim?
There are a few ways you can protect yourself from negative financial impacts if you need to file an uninsured or underinsured motorist claim. When getting insurance quotes for car insurance, make sure to ask about coverage limits and how underinsured and uninsured motorist claims are processed, and find out information about the deductible associated with these types of claims. Products such as dashcams can help protect against hit-and-run accidents and determine who is the at-fault driver in a car accident.
If you have questions about filing an uninsured or underinsured motorist claim with your insurance, feel free to reach out to our attorneys who are experienced in handling these types of claims. Contact us today for a free consultation!