INSURANCE RAISING PREMIUMS, OR CANCELLING POLICIES AFTER A MOTOR VEHICLE ACCIDENT, OR FOR MAKING A CLAIM
QUESTION: Will my insurance company raise my rates, or drop me for making a claim, following a not-at-fault motor vehicle accident?
We understand that many people are afraid to make a PIP or Uninsured Motorist claim under their policy (including having family members making a claim under their policy). To ease your concerns, here are some facts you need to know.
FACT: Florida law significantly limits an insurance company’s ability to raise your premiums*, just because you, a passenger, or a family member make a claim for PIP, or Uninsured Motorist benefits in a not-at-fault accident (*or to cancel, or non-renew you).
FACT: They also, must inform you of the opportunity to challenge their decision, including, that you are entitled to a refund, or renewal, if (1) you demonstrate that the operator of the car was not at-fault and (2) the insurance company does not have “good faith” information showing you/your driver was “substantially at fault”. (Paragraphs 3.a; 3.b; & 3.b.(VIII) of the statute).
FACT: They must present you with “complete proof” of fault, or other criteria in the statute, which justifies the additional charge or cancellation. (Paragraph 5 of the statute)
FACT: Any rate increase, or nonrenewal of your coverage without fault, may make the insurance company liable to you for Bad Faith Damages.
When They Can Raise Your Rates, and/or non-renew your policy following a motor vehicle accident.
o Collision Claims: If your insurance company makes a payment under your collision coverage and they are not able to recover their money back from the responsible party, they may raise your rates. Collision claims are not covered by the statute.
o If you, or the driver of your car were “at-fault” for the accident.
o If you have had three or more accidents, regardless of fault, during the most recent 3-year period.
o Traffic infraction (tickets) convictions
o Rate increases to all customers, or customers in a certain area. Insurance rates go up every year. These increases have nothing to do with your accident, or claim. If you are unsure why your rates went up, ask them for an explanation of your rate increase.
o Accident Free Discounts: You may lose some discounts, just for being involved in an accident. This is independent of filing the claim.
How these terms are defined and what situations they apply to, are set out in the excerpts* of the Statute below (*focusing on the types of issues which may arise out of a motor vehicle accident).
Excerpt of, Fl. Stat. 626.9541(1)(o)
Illegal dealings in premiums; excess or reduced charges for insurance.
3. a. [An insurance company cannot increase your premiums, or non-renew] a policy of motor vehicle liability, personal injury protection, medical payment, or collision insurance … solely because the insured was involved in a motor vehicle accident unless the insurer’s file contains information from which the insurer in good faith determines that [that you were] substantially at fault in the accident.
COMMENT: Although “substantially at fault” is not defined in the statute, at a minimum it should mean mostly (51%) at fault. Also, Paragraph 5 (below) says the insurance company must supply you with “complete proof” of this fault, upon your request. See also, Paragraph 3.b.(VIII) below.
b. [They Must] notify the named insured that he or she is entitled to reimbursement … or renewal …under the conditions listed below … if the named insured demonstrates that the operator involved in the accident was:
COMMENT: If the insurance company did not “NOTIFY” you about this, let us know, since that is a violation of law (see above). These are some of what you can show to get a refund and/or to force them to renew you and at the same rate.
(I) Lawfully parked;
(II) Reimbursed by, or on behalf of, a person responsible for the accident, or has a judgment against such person;
(III) Struck in the rear by another vehicle headed in the same direction and [you/your driver] was not convicted of a moving traffic violation in connection with the accident;
(IV) Hit by a “hit-and-run” driver, if the accident was reported to the proper authorities within 24 hours after discovering the accident;
(V) Not convicted of a moving traffic violation in connection with the accident, but the operator of the other automobile … was convicted of a moving traffic violation;
(VI) Finally adjudicated not to be liable by a court of competent jurisdiction;
(VII) In receipt of a traffic citation which was dismissed or nolle prossed; or
(VIII) Not at fault as evidenced by a written statement from the insured … which are not rebutted by information in the insurer’s file from which the insurer in good faith determines that the insured was substantially at fault.
COMMENT: Sub-paragraph VIII repeats paragraph 3.a, which requires a “good faith” determination that the driver was “substantially at fault” (At a minimum, this should mean you were mostly (51%) at fault. See also, paragraph 5 (below), which requires they supply you with their “complete proof” of fault upon your request.
c. In addition, … an insurer may not fail to renew a policy if the insured has had only one [at-fault accident] within the current 3-year period. However, an insurer may nonrenew a policy for reasons other than accidents in accordance with Fl Stat §627.728. This subparagraph does not prohibit nonrenewal … [if the] insured has had three or more accidents, regardless of fault, during the most recent 3-year period.
4. Imposing …requesting an additional premium .., or refusing to renew, … solely because the insured committed a noncriminal traffic infraction as described in Fl Stat §318.14, unless the infraction is:
a. A second infraction committed within an 18-month period, or a third or subsequent
infraction committed within a 36-month period.
b. A violation of §316.183, when such violation is a result of exceeding the lawful speed limit by more than 15 miles per hour.
COMMENT: Applies to your getting a ticket, whether or not it involved an accident.
5. Upon the request of the insured, the insurer and licensed agent shall supply to the
insured the complete proof of fault or other criteria which justifies the additional charge or cancellation.
COMMENT: We believe a “good faith” justification is implied by Paragraph 3.a.
10. Imposing, or requesting an additional premium for motor vehicle comprehensive or uninsured motorist coverage solely because the insured was involved in a motor vehicle accident, or was convicted of a moving traffic violation.
12. No insurer shall impose or request an additional premium, cancel a policy, or issue a nonrenewal notice … because of any traffic infraction when adjudication has been withheld and no points have been assessed pursuant to §318.14(9) and (10). However, this subparagraph does not apply to traffic infractions involving accidents in which the insurer has incurred a loss due to the fault of the insured.
COMMENT: Just because your Auto Accident ticket was dismissed, does not mean the accident was not your “fault” for purposes of this section, if they incurred some loss (i.e., a claim is made on the policy). However, Paragraph 3.a, still requires they be able to make a “good faith” determination that you were “substantially at fault” for the accident. While “substantially at fault” is not defined in the statute, at a minimum it should mean mostly (51%) at fault. Remember, Paragraph 5 says they must supply you with “complete proof” of this fault, upon your request.