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Claims vs. rate increase

Updated: Aug 31, 2022

If I use my car own insurance, won’t my rates go up?

In most car crashes involving an injury, you will need to involve your own car insurance company. But clients sometimes worry that if they make a claim with their own insurer, that could make their rates go up. Well, if the crash wasn’t your fault, then your rates probably won’t be affected. In Washington, there is actually a law that prevents insurers from raising your rates if you did not cause the crash. In Oregon there is no such law but in our experience, insurers generally do not raise your rates if the crash isn’t your fault. But even if they did, you would still most likely come out ahead by making a claim, than by not making one. Here’s why.

Let’s say that if you make a claim against your own insurance, your rates will go up by $500 a year for the next three years. That’s a total rate increase of $1,500. Now let’s say you have an Oregon policy with $15,000 of PIP coverage which pays your medical bills, and $25,000 in uninsured motorist coverage which is available if you are hit by an uninsured driver. That’s potentially $40,000 in total benefits that you would miss out on if you didn’t make a claim. So, does it make sense to give up $40,000 to avoid paying $1,500? No. You normally come out way ahead if you make an insurance claim, even if this causes your rates to go up.

As always, every situation is unique, and what I just said may not apply to what you’re going through. Therefore, before taking any legal action, you should always call a lawyer who can advise you of your best legal options.

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