Risk and exposure drive insurance premiums. The greater the risk and exposure, the higher the premium. Period.
In the vernacular of this blog, risk and exposure have different meanings. Risk represents the chance of something happening, while exposure represents the consequences after that something happens. Premiums are set based on both: A high risk driver pays more than a low risk driver, and the higher the coverage limits, the higher the premium.
Our vehicle crash clients often question if their insurance rates will rise or they will be dropped from coverage if they make a claim under their own policy when they are not at fault. The type of benefits typically claimed include PIP, property damage - collision, car rental, and UM/UIM.
While the simple answer would seem to be No, Florida law is not quite as definitive. We'll analyze it here.
Section 626.9541 is the Florida statute that addresses the issues. In pertinent part it reads:
626.9541 Unfair methods of competition and unfair or deceptive acts or practices defined.--
(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS.--The following are defined as unfair methods of competition and unfair or deceptive acts or practices:
(o) Illegal dealings in premiums; excess or reduced charges for insurance.--
3.a. Imposing or requesting an additional premium for a policy of motor vehicle liability, personal injury protection, medical payment, or collision insurance or any combination thereof or refusing to renew the policy solely because the insured was involved in a motor vehicle accident unless the insurer's file contains information from which the insurer in good faith determines that the insured was substantially at fault in the accident.
b. An insurer which imposes and collects such a surcharge or which refuses to renew such policy shall, in conjunction with the notice of premium due or notice of nonrenewal, notify the named insured that he or she is entitled to reimbursement of such amount or renewal of the policy under the conditions listed below and will subsequently reimburse him or her or renew the policy, if the named insured demonstrates that the operator involved in the accident was:
(I) Lawfully parked;
(II) Reimbursed by, or on behalf of, a person responsible for the accident or has a judgment against such person;
(III) Struck in the rear by another vehicle headed in the same direction and was not convicted of a moving traffic violation in connection with the accident;
(IV) Hit by a "hit-and-run" driver, if the accident was reported to the proper authorities within 24 hours after discovering the accident;
(V) Not convicted of a moving traffic violation in connection with the accident, but the operator of the other automobile involved in such accident was convicted of a moving traffic violation;
(VI) Finally adjudicated not to be liable by a court of competent jurisdiction;
(VII) In receipt of a traffic citation which was dismissed or nolle prossed; or
(VIII) Not at fault as evidenced by a written statement from the insured establishing facts demonstrating lack of fault which are not rebutted by information in the insurer's file from which the insurer in good faith determines that the insured was substantially at fault.
c. In addition to the other provisions of this subparagraph, an insurer may not fail to renew a policy if the insured has had only one accident in which he or she was at fault within the current 3-year period. However, an insurer may nonrenew a policy for reasons other than accidents in accordance with s. 627.728. This subparagraph does not prohibit nonrenewal of a policy under which the insured has had three or more accidents, regardless of fault, during the most recent 3-year period.
4. Imposing or requesting an additional premium for, or refusing to renew, a policy for motor vehicle insurance solely because the insured committed a noncriminal traffic infraction as described in s. 318.14 unless the infraction is:
a. A second infraction committed within an 18-month period, or a third or subsequent infraction committed within a 36-month period.
b. A violation of s. 316.183, when such violation is a result of exceeding the lawful speed limit by more than 15 miles per hour.
10. Imposing or requesting an additional premium for motor vehicle comprehensive or uninsured motorist coverage solely because the insured was involved in a motor vehicle accident or was convicted of a moving traffic violation.
12. No insurer shall impose or request an additional premium, cancel a policy, or issue a nonrenewal notice on any insurance policy or contract because of any traffic infraction when adjudication has been withheld and no points have been assessed pursuant to s. 318.14(9) and (10). However, this subparagraph does not apply to traffic infractions involving accidents in which the insurer has incurred a loss due to the fault of the insured.
- Rate increases and nonrenewals on policyholders not at fault are prohibited.
- Nonrenewing a policy is prohibited if the insured has had only one accident in which he or she was at fault within the current 3-year period. Interestingly, the statute does not appear to prohibit a rate increase in this scenario.
- Policyholders can challenge increases and nonrenewals based on fault by demonstrating a lack of fault through a variety of outlined indicia.
- The insurer is not prohibited from nonrenewing a policy when the insured has had three or more accidents during the most recent 3-year coverage period regardless of fault. The insurer can do this even if a claim has not been made against the policy.
- Insurers are allowed to seek additional premiums and nonrenew policies for an accumulation of noncriminal traffic infractions.
- Insurers are not allowed to increase rates and nonrenew motor vehicle comprehensive and uninsured motorist coverages solely because the insured was involved in a motor vehicle accident or was convicted of a moving traffic violation. This is sensible because the insured as a risk factor is not relevant in setting rates for these coverages. Neither comprehensive nor UM/UIM are triggered by the insured's fault.
- The insurer may not raise rates or nonrenew if adjudication because of a traffic infraction has been withheld and no points have been assessed. However, the insurer may increase and cancel if it has incurred a loss due to the insured's fault in an accident. It is not unusual for an insured to beat a ticket or have adjudication and points withheld, yet have the carrier pay for accident related damages. This is because the outcome of an infraction in traffic court does not control the insured's civil liability. Read this blog.
Contact us toll free at 866-785-GALE or by email (firstname.lastname@example.org) for a free, confidential consultation to learn your legal rights.
Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals - the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.
While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are "people" and not "cases" or "files." We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.