There are many forms of insurance that individuals can use today to get themselves through difficult times. If you are hurt in an accident, you might be able to take advantage of personal injury protection(PIP) insurance. PIP benefits are given to those who suffer medical costs, lost wages, and other financial setbacks as a result of their accident. While these policies are mandatory in some states, they are optional in others. When you have a policy of this nature, you might receive a check to make you at least partially whole after your wreck. It’s still insurance, though, so you’ll need to think hard the consequences of filing a claim. In some cases, your insurance rates can go up.
The meaning of “no fault” PIP coverage
The vast majority of PIP insurance packages are done on a “no fault” basis. This means that whether you were the one that caused the accident or the faultless victim, you’ll be able to file a claim for PIP benefits. Some confuse this no fault PIP coverage with the no fault dynamics on personal car insurance. Car insurance companies sometimes use the term no fault to describe what happens to your insurance premium after a claim. In those cases, when they use the term no fault, they’re suggesting that your rates will remain the same. This is not true when it comes to PIP coverage.
Every insurance company is different
You should know that every insurance company you work with will have a different policy, and some may make decisions on a case-by-case basis. Any hard and fast rule on what happens to your insurance rates after a PIP claim are likely to fail you. The best option for you is to check with your own insurance company to determine how they handle the aftermath of filing a PIP claim. They’ll likely sort out these details with you.
What happens in most cases?
While it’s difficult to talk in generalities about PIP claims, you can prepare yourself by knowing what happens in the bulk of cases. In most cases, filing a PIP claim will cause your insurance rates to go up. These rates can rise in one of two ways. You can either see an increase in your PIP insurance premiums only or you could see an increase in your car insurance and your PIP premiums. Some insurance companies bundle these coverage options together, so you won’t have a chance to recognize the difference between the two.
Insurance companies are in the business of risk, and they will have taken your risk profile into account before setting your rates. However, getting into a car wreck is a new piece of information that can change the game for insurance providers. With this new information, they will have to re-assess the risk you present to their company. Your rates may be adjusted as a result of this, leaving you with higher monthly premiums and potentially a higher deductible, too.
Do you have to use the PIP coverage?
Some people worry enough about their PIP rates increasing that they won’t file a claim unless that claim is likely to pay out a significant amount of money. This is the same calculus that individuals use when deciding whether to file a car insurance claim to account for a ding in their fender. There may be times when filing the claim is not worth it because of the increase in PIP costs down the road. At the same time, those who expect to receive a big settlement as a result of an accident may choose not to file a claim, even though by filing the claim they could stand to receive a double payment for their injuries and lost wages.
Contacting a lawyer is critical
Dealing with insurance companies can be a hassle, and good lawyers are usually able to guide you through the process. This will allow you to make a decision that can benefit your financial future over the long run. Good lawyers can advise you on the consequences of using your insurance and on your other available options.