Will Filing a First-Party Insurance Claim in Pennsylvania Raise Your Rates?

If you’ve recently experienced an incident that requires you to file a first-party insurance claim in Pennsylvania, you’re likely wondering, “Will this increase my insurance premiums?” The answer can be complex, as it depends on several factors such as the type of claim, fault, claim amount, and your insurer’s policies. This blog post unpacks these factors and explores scenarios where your rates might or might not be impacted. By the end, you’ll have a clearer picture of how to protect your premiums while getting the coverage you need.

What is a First-Party Insurance Claim?

A first-party insurance claim is one you file with your own insurance company under your policy’s coverage. This might include scenarios like:

• Collision Coverage Claims for accidents where you are at fault.
• Comprehensive Coverage Claims for non-collision events, such as theft, vandalism, or weather-related damage.
• Personal Injury Protection (PIP) Claims for medical bills under Pennsylvania’s no-fault insurance rule.

Your policy type and coverage levels dictate how much financial assistance you can receive and whether it might impact your future premiums.

Key Factors That Influence Rate Changes

Whether your rates increase after a first-party claim depends on several interrelated factors:

1. Type of Claim

The nature of the incident leading to your claim plays a significant role in whether your premiums will rise.

• Collision Claims

If you make a claim under collision coverage after causing an accident, your insurer may interpret this as evidence of higher risk. For example, if you accidentally rear-end another vehicle and file a claim for your vehicle’s repair, there’s a high likelihood of a rate increase.

• Comprehensive Claims

Claims for incidents like hail damage, theft, or vandalism are generally viewed as beyond your control. Consequently, these claims are less likely to result in a premium hike. For instance, if a tree branch falls on your parked car during a storm, your rates may not be affected.

2. Fault in the Incident

Pennsylvania operates under a no-fault system for medical payments, meaning your Personal Injury Protection (PIP) covers medical expenses regardless of fault. However, fault does matter for property damage and collision claims.

For example:

• If you’re deemed at fault in an accident, your insurer may raise your premiums based on the increased risk.
• If another party is at fault and their liability coverage pays out, your rates typically won’t increase if you’re not to blame.

3. Claim Amount

The size of your claim can also influence rate changes. Insurers are less likely to raise premiums for small claims. However, large payouts, such as extensive repairs costing thousands of dollars, might trigger a rate increase.

Here’s a breakdown:

• Filing a claim for minor hail damage requiring a $500 repair may not affect your rates significantly.
• Filing a claim for $6,000 in damage following a major at-fault accident is more likely to lead to higher premiums.

4. Your Insurance Company’s Policies

Each insurance provider handles claims and rate adjustments differently. Some key variations include:

• Accident Forgiveness Programs

Many insurers offer accident forgiveness for policyholders with clean driving records. This benefit ensures that your first at-fault accident won’t impact your premiums. For example, if this is your first collision in five years, your insurer might waive the penalty.

• Claim-Free Discounts

On the flip side, insurers often reward drivers who remain claim-free. Filing a first-party claim could cause you to lose a discount, indirectly increasing your rate.

5. Your Claims History

Your entire claims history is another critical factor. Insurers view a clean record favorably, while frequent claims could label you as a high-risk customer.

For instance:

• Suppose you’ve gone five years without filing a claim, and this is your first comprehensive claim for hail damage. The impact on your premium will likely be minimal.
• However, if you’ve filed multiple claims in the past two years (e.g., an at-fault accident and a vandalism claim), a new claim will likely lead to a noticeable rate increase.

Scenarios Where Rates Might or Might Not Increase

Rates Might Increase:

• Filing a collision claim where you are at fault.
• Submitting a large claim for extensive car repairs.
• Having a history of multiple claims within a short timeframe.

Rates Might Not Increase:

• Filing a comprehensive claim for events out of your control (e.g., weather damage or theft).
• Utilizing accident forgiveness for your first at-fault claim.
• Filing a PIP claim for medical expenses under Pennsylvania’s no-fault rules.

How to Minimize Potential Rate Hikes

While you can’t always control the need to file a claim, there are steps you can take to reduce the likelihood of rate increases:

1. Understand Your Policy

Review your policy to understand what’s covered and how claims may impact your premiums. Look for benefits like accident forgiveness or claim-free discounts.

2. Pay Out-of-Pocket for Minor Damages

For smaller repairs, paying out-of-pocket may be cheaper in the long run than filing a claim and risking higher monthly premiums.

3. Improve Your Driving Habits

A clean driving record is your best defense against premium hikes. Practice defensive driving and adhere to traffic laws.

4. Bundle Insurances

Many insurers offer multi-policy discounts (e.g., for bundling auto and home insurance), which can offset potential increases.

5. Shop for Competitive Rates

If your insurer imposes a significant rate hike, it might be worthwhile to shop around for a better deal.

Consult Your Insurer for Specific Guidance

There’s no one-size-fits-all answer to whether filing a first-party claim will impact your premiums in Pennsylvania. Each situation is unique, depending on your insurer’s policies, the type of claim, and your personal history. The best way to understand the potential impact is to consult your insurance provider directly. They can offer personalized advice tailored to your policy and circumstances.

Final Thoughts

Filing a first-party insurance claim in Pennsylvania doesn’t automatically mean your premiums will skyrocket, but it’s essential to evaluate the specifics of your situation. By understanding the factors at play—such as the type of claim, fault, and your insurer’s policies—you can make informed decisions that protect both your finances and your insurance rates. Always weigh the pros and cons of filing a claim, and when in doubt, seek guidance from your insurer.