Many people fear that if they make a claim against their own insurance that their rates will go up. This is not always the case. There are many times when making a claim does not affect your own rates, and there may actually be advantages to making the claim against your own carrier. This article will address two types of insurance policies, auto insurance and homeowner’s insurance.

Making a claim against your own auto insurance policy

Automobile insurance includes many types of coverage. There is liability which insures the person against claims made against him, when the accident is his own fault. In other words, liability insurance is by definition pay for damages caused to others by the insured by causing an accident. This coverage applies when someone else is making a claim against your policy. Liaibility coverage cannot be used by the insured to make a claim. When a victim of the negligence of the insured makes a claim against his liability insurance, that is based on the loss being the fault of the insured. This will cause your insurance premium to go up.

Many drivers purchase medical payments coverage on their auto policy. This is “no fault” coverage and covers medical expenses necessary because of an injury related to a car accident, regardless of who was at fault. This coverage is very useful because it will pay for the expenses for everyone in the insured vehicle and it pays currently to cover needed medical care or dental care. This is different than making a claim against another driver’s liability insurance. That company will not make any payment for treatment, and will make one payment to settle the entire case, which in many claims can be a long time.

Use of the medical payments provision when the cause of the accident is the insured will cause the premium to go up. If the medical payments are used to pay for needed care when the accident is the fault of another, then the payments would not cause the premiums to go up. This is because the payments are not the fault of the insured driver. The insurance premiums are based on the driving history of the insured driver(s), and will go up when there is evidence that they are a higher risk to insure.

Another type of coverage on the automobile policy is for injuries caused by an uninsured motorist (or a motorist with too little insurance). This is referred to as UM coverage. UM coverage will only pay if the cause of the accident is the uninsured person’s fault. Because these claims are based on the fault of somebody other than the insured driver(s) under the policy, they should not affect the insurance premium. In other words, since the claim is not evidence that the insured is a greater risk to insure in the future (being an innocent victim), there is no basis for the underwriters to increase the premium.

Hit and run cases are claims that are made under the UM coverage, and the same principles apply. The hit and run coverage will apply when the other driver who caused the accident cannot be found, and where there is contact between the vehicles. Swerving to avoid a collision with another car which results in an injury accident, without contact with the negligent driver, will not be covered. In this regard, it is safer to stay in the lane and absorb the impact rather than make a sudden move to avoid the accident which could be dangerous and cause an accident.

When an insured driver is the innocent victim of a car accident, he or she can use the collision coverage on the insurance policy. If the insured uses the collision coverage, this will not cause an increase in the premium where the accident is the fault of another. After paying for the repairs or for the total loss of the insured vehicle, the auto insurance company will get its money back from the wrongdoer’s insurance company. This is called subrogation.

There is an advantage to using the collision coverage after an accident that is the fault of another driver. It is best not to speak with anyone from the insurance company of the adverse driver if there is going to be a personal injury claim. By limiting contact to one’s own auto insurance company in dealing with the car repair or replacement under the collision coverage, one can avoid the pitfalls involved with talking with the adversary. Watch a video about car insurance.

Claims against your own homeowner’s insurance

Homeowner’s insurance concerns itself with the number of claims that have been made against the homeowner’s policy. This claims history is used to increase the premiums going forward, and when there have been several claims (different companies vary on the number and amount) the insurance company will use that as a basis to either cancel the policy or refuse to renew it.

A new homeowner’s insurance company will ask for and get the complete history of claims made under the previous policy, and if there is a significant history of claims made, that will adversely affect the ability to get a new homeowner’s policy.

The lesson with homeowner’s insurance is to avoid making claims unless you have to do so, and if the amount is large enough. The effect of making that claim may be the evenual loss of the policy.

If you are injured and have a personal injury claim, remember it is always best to contact an experienced personal injury law firm as soon as possible. They will not get paid until they finally settle your case. See the video on the “contingent fee”.