Do Hit and Runs Raise Your Insurance Premiums? The Unvarnished Truth

Yes, hit and runs almost invariably lead to an increase in your insurance premiums. The reasons are multifaceted and often depend on the specific circumstances, your insurance policy, and the state in which you reside.

The Anatomy of a Premium Increase After a Hit and Run

Let’s dissect why a hit and run incident can wreak havoc on your insurance rates. It boils down to risk assessment. Insurance companies are in the business of evaluating the likelihood of future claims. A hit and run event, even if you weren’t at fault, flags you as a higher risk to insure. Here’s the breakdown:

1. Unidentified At-Fault Driver and Uninsured Motorist Coverage

In a hit and run, the at-fault driver is, by definition, unidentified. This means you can’t pursue damages from their insurance company. This is where uninsured motorist property damage coverage comes in. If you have this coverage (and many states require it), your insurance company will pay for the damages to your vehicle. However, filing a claim under uninsured motorist coverage can still lead to a premium increase. Insurance companies view these claims similarly to at-fault accidents, albeit with some nuances. They see it as an indication that you are more likely to be involved in an accident in the future, regardless of fault.

2. “Not At Fault” Doesn’t Always Mean “Premium-Free”

While you weren’t the perpetrator of the hit and run, your insurance company still has to pay out for the damages (assuming you have the appropriate coverage). This claim payout contributes to the overall pool of money the insurance company uses to cover claims. To replenish that pool, they may increase premiums across the board, or specifically for individuals they deem a higher risk, which includes those who have recently filed claims, even if deemed “not at fault.” The rationale is, statistically, people involved in one accident are more likely to be involved in another.

3. The Comprehensive Coverage Conundrum

If you only carry comprehensive coverage, you might think you’re in the clear regarding premium increases. Comprehensive coverage typically covers damages from events like vandalism, theft, and natural disasters. A hit and run, while involving another vehicle, can sometimes be classified as vandalism, especially if the damage is significant. While comprehensive claims are generally less likely to trigger a rate hike than collision claims, they can still have an impact, especially if you have a history of claims.

4. The “Safe Driver” Discount Disappearance

Many insurance companies offer discounts for drivers with a clean record, often called a “safe driver” discount. A hit and run claim, regardless of fault, can jeopardize this discount. Losing the discount can be a significant factor in your premium increase.

5. State Laws and Regulations

State laws play a crucial role in determining how insurance companies can adjust premiums after accidents. Some states have regulations that protect drivers from premium increases after not-at-fault accidents, including hit and runs. However, these regulations often have limitations. For instance, they might only apply if the damage is below a certain threshold or if the at-fault driver is eventually identified.

6. Your Insurance Company’s Policies

Each insurance company has its own underwriting guidelines and risk assessment models. Some companies are more lenient than others when it comes to hit and run claims. Some may only increase your premium if you have multiple claims within a specific timeframe. It’s essential to understand your insurance policy and the specific policies of your insurer.

Frequently Asked Questions (FAQs) About Hit and Runs and Insurance Premiums

Here are 12 frequently asked questions to clarify the complexities surrounding hit and runs and their impact on your insurance rates:

1. Will reporting a hit and run to the police affect my insurance rates?

Reporting a hit and run to the police is crucial, even if you’re worried about your insurance rates. Failing to report it can jeopardize your ability to file a claim and may even be illegal. While reporting the incident itself might not directly cause an increase, the subsequent claim you file with your insurance company most likely will.

2. What if I only have liability insurance?

Liability insurance only covers damages you cause to others. If you are the victim of a hit and run and only have liability coverage, your insurance will not pay for the damages to your vehicle. You will have to pay out-of-pocket for the repairs. This, thankfully, means your rates will not increase because you aren’t filing a claim.

3. How much will my insurance premiums increase after a hit and run?

The amount of the increase varies depending on numerous factors, including the severity of the damage, your driving record, your insurance company, and state regulations. It could range from a slight increase of a few dollars per month to a substantial increase of hundreds of dollars per year.

4. Can I avoid a premium increase by paying for the damages out of pocket?

Yes, if the damages are relatively minor, you might consider paying out of pocket to avoid filing a claim. However, carefully weigh the cost of the repairs against the potential premium increase over the next few years. Get estimates from multiple repair shops before making a decision.

5. Should I get multiple insurance quotes after a hit and run?

Absolutely. After a hit and run, it’s wise to shop around and get quotes from other insurance companies. Some companies may offer more competitive rates, even with the hit and run on your record.

6. How long will a hit and run affect my insurance premiums?

The impact of a hit and run on your insurance premiums typically lasts for three to five years. After that, the incident will no longer be factored into your rate calculation.

7. What is diminished value and how does it relate to hit and runs?

Diminished value refers to the loss of a vehicle’s market value after it has been damaged and repaired. Even after repairs, a vehicle with a history of accidents, including hit and runs, may be worth less than a similar vehicle with a clean record. In some cases, you may be able to file a diminished value claim against the at-fault driver’s insurance company (if they are identified).

8. Can I appeal a premium increase after a hit and run?

You can always appeal a premium increase, especially if you believe it’s unwarranted. Provide your insurance company with any evidence that supports your case, such as a police report indicating you were not at fault or documentation demonstrating the limited extent of the damage.

9. Does a hit and run affect my credit score?

A hit and run incident itself will not directly affect your credit score. However, if you fail to pay your insurance premiums or any associated debts related to the accident, it could negatively impact your credit.

10. What if the hit and run driver is found?

If the hit and run driver is eventually found, your insurance company can pursue them for reimbursement of any damages they paid out. In this scenario, your premium might be adjusted downward, but it’s not guaranteed.

11. Will my rates increase if my parked car is hit in a hit and run?

Yes, even if your car was parked and unoccupied when it was struck in a hit and run, filing a claim for damages can still lead to a premium increase. As mentioned before, insurance companies view claims, regardless of fault, as an indication of increased risk.

12. What steps should I take immediately after a hit and run?

1. Stay calm: Assess the situation and ensure your safety.
2. Call the police: Report the incident and obtain a police report.
3. Gather information: If possible, note any details about the other vehicle, such as the make, model, color, and license plate number (even partial).
4. Document the damage: Take photos and videos of the damage to your vehicle.
5. Contact your insurance company: Report the incident and file a claim.
6. Seek medical attention: If you are injured, seek medical attention immediately.

Understanding the intricacies of how hit and runs impact your insurance premiums is crucial for navigating the aftermath of such an event. By being informed and proactive, you can minimize the financial burden and protect your driving record. Remember, transparency with your insurance company and a thorough understanding of your policy are your best assets in these challenging situations.