Insurance companies cannot raise insurance premiums in New York for some accident claims against a family member, relative, or spouse, but insurance premiums can go up with other claims.
Just because a premium can be increased doesn’t mean it will go up.
Even if you don’t file a claim, the insurance premium may still go up.
For many reasons stated in this article, it never makes sense to decide whether to file a claim or not because of the concern that the insurance premium may go up.
It’s not always possible to answer the question, “Will my insurance premium go up?” Every insurance company and insurance policy is different, and underwriting decisions are company secrets. However, an educated guess is possible – keep reading!
When the Insurance Company Cannot Increase Your Relative’s Premium
If you are injured in a hit-run accident, pedestrian accident, or bicycle accident and live with a relative who owns a car, you can file an uninsured claim against your relative’s car insurance, and their premium cannot be raised.
The New York State Department of Finance Office of General Counsel issued an opinion that your family member or relative’s insurance company is NOT allowed to increase their insurance premium if you file an uninsured claim because they weren’t at fault.
If you were injured in a car accident and live with a relative who owns a car with more insurance than the car that caused your injury, you can get more money by filing an underinsured claim with your relative’s insurance company. Again, your relative’s insurance company can NOT increase your relative’s insurance policy premium if you file a claim!
When Can the Insurance Company Increase My Relative’s Premium?
If your friend or relative was driving their car and was negligent for causing the car accident and your injury, you could file a liability claim, and their premium could be increased at renewal. However, there’s a way to deal with that. Read below about our client who got $100,000 from his brother’s insurance and then gifted money to his brother to pay the entire premium.
If you tripped at your cousin’s house, the insurance company could increase the premium, but it’s not likely. Insurance companies make much more profit on homeowner policies and are more tolerant of claims. See below what happened to my homeowner’s policy premium when my father was insured at my house and sued me.
The Insurance Premium May Not Go Up
The insurance premium probably will not go up just because you sue your friend, family member, spouse, or relative.
Many insurance companies offer “Accident Forgiveness,” which means the premium will not go up for the first accident.
Insurance premiums are not always increased because a claim is filed or because there was an accident. But an insurance premium might be increased because of an accident even if no claims were filed.
For instance, you could have an accident without injuries or claims, but if a police report was filed, your insurance company will find out about it and may increase your premium.
Some claims that can increase an insurance premium are mandatory and required by law. When a driver or passenger is injured, NYS law requires that the ambulance bill, hospital or urgent care bill, and other medical treatment be paid by the car’s No-Fault insurance. This may or may not increase the premium.
Insurance companies usually look at many factors to decide whether and by how much to increase a premium, such as:
- Policy provisions.
- The number of accidents that occurred in the last 40 months.
- The number of claims made (for anything) in the last 40 months.
- The amount of money that was paid out for a claim.
- Tickets with a conviction an insured received in the last 40 months.
- Credit history.
- Zip code, and much more.
Someone Else Can File a Claim That Can Increase the Premium
Many different claims are filed by different people and companies when you are injured in an accident.
Again, the insurance premium may not go up just because of an accident with claims. But when an insurance company decides to increase a premium, any one of these claims can result in the premium going up even if you don’t file a claim for your injury or property damage.
For instance, the following people and companies may directly file a claim:
- Property damage someone else sustained
- Hospital, ambulance, doctors, and other medical providers
- Other people injured
- Even the government may file a claim
If you have an accident that can be covered by your family’s or relative’s insurance, it is likely that your family’s or relative’s insurance will have to be involved in the claims process anyway, even if you don’t file a claim.
Adding Your Claim When Other Claims Were Made Should Not Increase the Premium
If your family member or relative’s insurance premium is increased because of an accident or incident, any one of the above claims can trigger the increase.
Additional claims for the same accident or incident should not affect the policy premium because insurance companies look at the incident, fault, and total paid out for all claims.
For instance, if you are injured in a friend’s car, the hospital will file a claim against your friend’s New York No-Fault insurance to get paid for treating your injury, which can increase the premium even if you don’t file a claim.
When I was waiting at a red light, and my car was hit in the rear by a drunk driver, my father and I were injured and received a few weeks of medical treatment. Even though we were hit in the rear by a drunk driver, Liberty Mutual canceled my car insurance policy because of the money paid by No-Fault. I changed to Allstate, which surcharged my premium by $60 every six months because of the accident.
How Much Will the Insurance Premium Go Up?
If the insurance premium is increased, it may be a very small amount or could be more depending on the policy claims history and other factors.
Liberty Mutual canceled my auto insurance when I was stopped at a red light and hit in the rear by a drunk driver who was arrested and convicted. When Liberty Mutual canceled my policy, I would have been assigned risk. But I called Allstate, and they sold me an insurance policy with the same coverage for only $60 more.
USAA is known for not canceling policyholders and not increasing premiums because of a claim. If you were in the military or a son or daughter of a current or former member of the military, call USAA.
Even if the insurance premium increases, it will be a very small amount compared to the amount of money we obtain for you. The premium increase could usually be somewhere between a few hundred dollars to $1000 per year for three years.
If we only obtain $50,000 for you, it will more than cover the premium increase. Just make a gift to your friend to pay his premium increase. If we settle your case for $100,000 or $300,000, do you really want to think about the cost of a premium increase?
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What Can Happen if I Don’t File a No-Fault Claim With My Family’s Insurance?
If you are injured in a relative’s car and give your health insurance to the hospital because you don’t want to file a No-Fault claim against your family’s insurance, you’re looking for problems.
The hospital and every doctor who treats you will file a claim with your health insurance company, and one of three things can happen.
- The hospital may bill the car’s No-Fault insurance if the hospital quickly finds out you gave them your health insurance information.
- Your health insurance company will obtain a copy of your hospital records and deny the hospital bill when they see you have injuries from a car accident. The hospital will start billing you for your medical treatment, which could be thousands of dollars.
- Your health insurance company may pay the claim and later find out that you were injured in a car accident and come after you to get their money back.
If any of these things happen to you, call us, and we will fix the problem.
One of our clients was injured in a single-car accident in another state. The car was driven by a friend who was uninsured. A personal injury lawyer in that state told her that she didn’t have a case because the driver was uninsured.
When she got out of the hospital and came back to New York, she called us. We told her that since she was living with her mother at the time of the accident, she could file an uninsured claim with her mother’s car insurance. But her mother would not let her file a claim because she was afraid her insurance would go up.
Six months later, she called us back because her mother’s health insurance found out that she was injured in a car accident. The health insurance company sent a letter to her mother asking her to repay the $16,000 hospital bill because New York State law requires No-Fault to pay for injuries caused by a car accident, even if the accident was in another state.
We filed an uninsured claim against her mother’s car insurance and settled the claim for $100,000.
What Happened When Someone Didn’t Want to Sue His Brother
I had a disabled neighbor who broke his hip requiring surgery when his brother’s truck was in his driveway, rolled back, and hit him. My neighbor didn’t want to file a No-Fault claim against his brother’s insurance or sue his brother, and his family was adamant about it, so he made up a story that he tripped.
This meant that Medicare would have to pay the medical bills instead of the truck’s No-Fault insurance and also meant that my neighbor wouldn’t receive compensation for his injury.
The problem is that New York State law determines which insurance has to pay medical bills in a car accident. Eventually, Medicare stopped paying, and he now had to file a claim with the truck’s No-Fault insurance, but it was now 6 months after the accident, and he only has 30 days to file a No-Fault application.
Although it was late, we got his brother’s No-Fault insurance to reimburse Medicare $50,000. We also got his brother’s insurance to pay our client the entire $100,000 policy.
Of course, we never sued his brother because our client didn’t want to. We believe our client paid his brother’s entire insurance premium as a gift.
What Happened to My Insurance Premium When My Father Sued Me
My father was injured at my house when he tripped on a toolbox I left on the steps to the garage. There are three steps to the garage, and when the house was built, the builder didn’t install a handrail. My father tripped and flew into and over a large air compressor I had in the garage. After my father’s accident, I installed a handrail!
I reported the accident to my insurance company. I then called a friend.
I can’t sue myself, so I called a friend who is a personal injury lawyer and said, “I need you to sue me.” The claim was settled for $75,000.
My insurance premium was never increased because of the accident. In fact, I’m still with the same insurance company, and my insurance premium is about what it was 25 years ago when the accident happened.
Am I Taking Advantage of the Insurance Company?
No. Insurance companies determine how much money they will have to pay out for claims. The insurance company adds the cost of overhead, sales commissions, other risk factors, and desired profit to calculate the premium.
What if I sue my wife or husband? If you want to be able to sue your spouse you will buy special coverage for that and pay a separate additional premium.
Your insurance company determines how much money they will have to pay to policyholders who sue a spouse. Again, the insurance company adds the cost of overhead, sales commissions, other risk factors, and desired profit to calculate the premium.
If you don’t want to file a claim against your husband or wife, why did you pay for the insurance coverage to do that?
Is Suing My Friend or Family Member Bad?
You won’t file a lawsuit against your friend or family member to get their personal assets or money, and they won’t need to hire a lawyer.
Their insurance premium probably won’t even be increased, and with uninsured and underinsured claims, the insurance company is not allowed to increase their insurance premium.
You will just use the insurance benefits they bought insurance to provide,
How Do I Withdraw an Insurance Claim Against My Family, Relative, or Friend?
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Philip L. Franckel, Esq. is one of the HURT911® Dream Team™ Founding Partners at 1-800-HURT-911® New York; He has a 10 Avvo rating; Avvo Client’s Choice with all 5-star reviews; Avvo Top Contributor; and a former Member of the Board of Directors of the New York State Trial Lawyers Association.
Robert Plevy, Esq. is one of the HURT911® Dream Team™ Founding Partners at 1-800-HURT-911® New York. Rob began his legal career in 1993 as an Assistant Corporation Counsel defending The City of New York against personal injury lawsuits.