Will My Car Insurance Go Up If I Use It?

Unfortunately, there is a common myth out there that filing a claim under your own policy will increase your insurance premiums. While this may be true in some situations – depending on the state in which you live, your degree of fault, etc. – in others, if you are a completely innocent victim, your rates will not increase, and if they do, the increases will be very minimal.

Picture this – you are involved in a car accident and the at-fault party does not have any insurance, or does not have adequate amounts of insurance coverage to compensate you for your injuries. What now? How will you be able to recover what was so wrongly taken from you? If you have uninsured/underinsured motorist insurance of your own, you may be able to file a claim under your own policy for the damages that you have sustained. The insurance protection you pay premiums for is for you to use. Failure to use your insurance policy because of a fear of an increase in premiums could be exactly what the insurance company wants you to do.

While every state has different insurance laws, and each insurance company has different policy language and rules they follow, the general rule in Tennessee is that insurance providers are prohibited from increasing your insurance premiums if you are not at fault for the accident and elect to use your coverage. Below are the two main Tennessee statutes that protect people who utilize their own coverage after an accident with an uninsured driver:

• Tennessee Code Annotated 56-7-1109
  • This statute covers two specific circumstances. First, if you are employed as a driver, involved in a traffic accident on the job, and are operating a motor vehicle owned or leased by your employer, that accident cannot be considered against you in fixing your insurance premiums. Moreover, if the work accident did not involve any negligence on your part, your insurance provider is prohibited from increasing your premiums.
  • Second, whenever you are involved in an accident while operating a motor vehicle and you did not contribute to the collision in any way, your insurance premiums shall not be increased and that accident shall not be considered in determining your premiums. Moreover, if you are driving another’s insured vehicle with their permission and you are involved in an accident not involving any negligence on your part, the insurance carrier shall not increase the premiums of the owner of the vehicle provided that the owner did not violate his policy by allowing you to drive.
• Tennessee Code Annotated 56-7-1201(f)
  • Under this statute, no insurer shall increase the car insurance rate or premium of an insured with uninsured motorist coverage, nor shall they cancel coverage, due solely to the payment of any claim under that insured’s uninsured motorist coverage. This provision applies in situations when the at-fault driver is uninsured or underinsured. Essentially, you are free to use your insurance when the negligent party is uninsured and you should not have to worry about cancelation or an increase in premiums.

As stated earlier, each state is different, and different rules could apply depending on what type of policy you purchase. It is very important to read through your policy and ask your insurance agent any questions pertaining to rate increases before you accept them as your insurer. Depending on the circumstances, it could be beneficial to use your own insurance coverage if the at-fault party was uninsured or underinsured – even if your rates increase. If you pay for uninsured motorist coverage, it is there to protect you when someone else does not have insurance of their own.