Can my auto insurer increase my insurance rate because they paid medical bills under the med-pay rider regarding an accident for which I was not at fault?
Question Details:
I was hit head-on in a car accident. The other driver was found at fault and given 2 tickets. My insurance company paid my medical bills under my med-pay rider that I paid extra for. Now they are increasing my rates and say it is because they paid out for medical despite the fact I paid extra for that.
Yes, unfortunately they can do this: any time someone claims under any insurance policy (e.g. auto, home, umbrella liability, etc.), the insurer can--and frequently does--increase rates on him or her; the law does not prevent insurers from doing this. The ostensible reason is that statistically, someone who has put through claims is allegely more likely to claim again in the future; thus, the rates are recalculated as part of underwriting. Of course, it's very possibly a way to punish people for placing claims, to discourage claims, and/or to recover the money the insurer paid out per its obligations...but again, the ostensible reason is based on statistics and underwriting.
