When a client injured in a motor vehicle collision retains our firm, we always review their own automobile insurance policy. “But the other driver caused the collision, so why do we need to review my policy?” We’re often asked. Good question.
Many times, folks have coverages available under their auto policy that provides benefits in addition to monies recoverable from the responsible motorist’s insurance policy. For example, many auto insurers offer “medical payments” coverage. This is a no-fault coverage that provides reimbursement for medical expenses. This is true even though we ultimately reach a settlement with the responsible motorist’s auto insurer on our client’s liability claim (which includes payments for medical expenses, loss of earnings and pain and suffering damages). Or the other driver was underinsured, meaning our client’s damages exceed the liability limits of the responsible motorist, in which case our client may pursue an underinsured motorist claim. Sometimes, the responsible driver was uninsured, so our client’s only insurance remedy is to pursue a claim under their own uninsured motorist coverage.
“But I don’t want to use my coverages,” some will say. “That’s fine, but do yourself a favor: Call your agent and cancel the coverages,” we respond.
“Why would I want to do that?”
“Why would you pay for insurance you refuse to use? You might as well just cancel the coverage and save a few premium dollars in the process,” we reply.
“I’m worried that my insurance company will raise my rates.”
Fortunately, the Arizona State Legislature stepped in to give insurance consumers access to the coverages for which they paid a premium without fear of retaliation. In 1987, the legislature passed A.R.S. §20-263(A), which prohibits an auto insurer from increasing a premium if the collision was “not caused or significantly contributed to by the actions of the insured.” So unless you caused, or were the significant cause of the collision, your insurer can not increase your premiums if you pursue any benefits through your own policy.
We have never sold insurance and never will. And while we don’t believe in overinsuring, we should all carry ample automobile insurance coverages to protect ourselves and our families from harm caused by other motorists who may have little or no insurance coverage. Thanks to our own legislature, we may do so without worrying about whether our insurer will retaliate against us and raise our rates.
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