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Can Claims Under PIP Coverage Raise Insurance Rates?

by | Sep 5, 2021 | Car Accidents

Florida is a no-fault auto insurance state. This means that in the event of a car accident, you must first file a claim with your own insurer under the mandatory Personal Injury Protection (PIP) coverage. Although PIP coverage is mandated per state laws, insurance companies can act in bad faith and refuse to honor PIP claims or otherwise create problems for you if you file a PIP claim. This is where a Fort Lauderdale car accident lawyer can help you.

By law, insurance companies are prohibited from acting in bad faith. Examples of bad faith include refusing your claim on invalid grounds, not conducting proper investigations, not responding properly to your request for damages, or using delaying tactics. Another notable example of insurer bad faith is when the insurance company raises your premium rates after you file a claim under PIP coverage.

PIP Coverage Claims and Insurance Premium Rates

By law, an insurance company can’t increase the premium of your auto insurance policy simply because you were involved in a crash and filed a PIP claim. This is stipulated in Florida Statute 626.9541. As per the statute, the insurers are legally prohibited from increasing premium rates of any type of auto insurance policy just because the policyholder was involved in a crash.

However, a notable exception exists to this prohibition. If the policyholder who was involved in an accident was found substantially at fault, the insurance company then has the right to increase premium rates. This means that if you file a PIP claim, which is awarded regardless of who was at fault, you may be at risk of increased auto insurance rates only if you were substantially at fault.

What Is Substantial Fault?

Substantial fault is a vague term and it can mean many things. Florida laws do not specify exactly what constitutes substantial fault. So it is typically up to an insurance company to determine whether or not you were substantially at fault in causing a crash.

However, in most cases, insurers will consider that you were substantially at fault if your percentage of fault was 50% or higher. In such an event, you may likely face increased insurance rates. If your fault percentage is lower, it is likely that the insurer will not seek to increase your premium rates.

The percentage of fault is calculated after your insurance company conducts an investigation in collaboration with the insurers of other drivers involved in the crash. Such investigation must be conducted in good faith. This means that the insurer must not use any unfair or underhand tactics to skew your percentage of fault.

Why Increased Premium Rates?

When you are somehow 50% or more responsible for an accident, an insurance company may deem you as an above-average risk and thus increased your rates due to your PIP coverage. The premium rates of auto insurance policies reflect the amount of risk a policyholder poses. If a policy owner is low-risk, the premium rates are lower. The higher is the risk involved, the greater are the rates.

This is the key reason why insurers tend to increase the premium rates when you are significantly at fault in an accident. However, in many cases, it can be argued that the other driver was more at fault than you. You will need to back up this claim with relevant evidence, such as police reports, eyewitness statements, and bills pertaining to your injury treatments and vehicle damage.

If you feel that an insurance company is unfairly holding you responsible for a crash, you can seek professional legal help. It is also possible that the insurer conducts investigations and finds you less than 50% at fault, yet still asks you to pay higher premium rates. This is against the law and you may very well have a bad faith claim against the insurance company.

How Can a Fort Lauderdale Car Crash Lawyer Help?

If you suffered a car crash in Fort Lauderdale, we can help you. Here at Englander Peebles, our lawyers have helped countless Fort Lauderdale car crash victims recover compensation from the insurance company. Whether you are filing a claim with your own insurer under PIP coverage or filing a third-party claim against an at-fault driver, we are here to help you.

In addition to ensuring that you get the maximum amount of compensatory damages, we also work with you to secure your legal rights. This includes handling your own insurer to make sure you are not stuck with unfairly high premium rates. Reach out to us today to discuss your Florida crash claim with our lawyers.