Many people are rightly concerned that their insurance rates will go up or their policy of insurance will be cancelled if they use their PIP insurance after a car accident. The short answer is that if you were not at fault for the accident your insurance rates should not go up from the accident.
Your insurance rates should not go up if you use your legally required PIP insurance. There is some protection in Florida law for consumers. Florida Statue 626.9541 prohibits insurance companies from raising rates or cancelling coverage for improper reasons. Florida law provides that it is a deceptive or unfair act or practice when an insurance company raises rates or drops a policy holder without a legally valid reason. When an insurance company is determined to have committed a deceptive or unfair act, that insurance company may be subject to civil liability and fines. The insurance company can be fined up to ten thousand dollars for each violation in addition to administrative penalties.
If your rates go up or your policy is cancelled and you believe that the insurance company’s action were wrong or illegal, you should request that your insurance company provide you with the reasons for the increase of your rates or cancellation of your policy. If the insurance company fails to adequately explain or answer your inquiry, you can contact the Florida Department of Insurance Regulation at the statewide toll-free number 1-877-MY-FL-CFO (1-877-693-5236).
You can also file a specific complaint with the Florida Chief Financial Officer at the Division of Consumer Services. It is most important that you understand that you do not simply have to accept the insurance company’s rate increase or cancellation. You are entitled to answers and the State of Florida provides an avenue for you to force the insurance company to answer your questions.
Insurance companies can increase rates and cancel policies based on claim and accident histories as well as other factors. Insurance companies are in the business of managing risk. To do this effectively, these corporations will not only review claim histories but also employ algorithms that analyze many factors such as locations, traffic, population density and crime rates. While your rates may go up or your policy may be cancelled, it may have nothing to do with your PIP claim. But you have the right at ask and the means to get your answers.