Will my car insurance policy cover a hit and run?

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific car insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life...

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Reviewed byMelanie Musson
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UPDATED: Mar 13, 2020

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Yes! Under several different sets of circumstances, a vehicle owner can file an auto insurance claim for a hit and run accident.

A hit and run is damaged caused by an unknown vehicle (or person) who left the scene of the accident. The first type of auto insurance claim would be one involving the vehicle owner’s own policy and collision coverage rider. The second type of claim would be available only if your state requires your insurance carrier to provide no fault insurance coverage.

What is collision coverage?

If you obtained a bank loan or other financing to buy a vehicle, you almost certainly have collision coverage. Banks and finance companies require collision coverage to help guarantee their investment. Without collision coverage, a vehicle owner might lack the means and/or motivation to pay for needed repairs. This causes the value of the vehicle, the bank’s investment to diminish.

Collision provides for the repair of any damage to the vehicle (regardless of who was at fault) subject to a deductible. The policyholder must pay the deductible amount, usually between $200 and $1,000 out-of-pocket and the insurance company will usually pay the balance of the claim directly to the auto repair shop, as long it does not exceed the policy coverage and was due to an insured event.

Will my car insurance rates go up if I file a collision claim?

Yes. Typically, auto premiums are likely to rise after most any claim that’s been filed by the policyholder and paid by the company. However, there are a couple of exceptions to this rule.

First, a number of car insurance companies will cover small amounts of damage, in some cases up to $1,000, without charging the client for the accident. This service is obviously reserved for policyholders with good driving records and who rarely file insurance claims.

Second, there are a number of auto insurance who offer some form of accident forgiveness coverage. This benefit may be available at an additional cost or as part of a company’s basic automobile policy. Under a forgiveness program, the insurance company is bound to pay a claim on a first accident or on one accident within a specific number of years, without imposing a rate increase in subsequent years. Policyholders should be careful to read the fine print on these agreements, as timeframes such as four, five, or seven years may apply. There may also be dollar limitations or maximum coverage amounts for these programs as well.

What is no fault insurance?

Many states passed laws in the 1970s that required vehicle owners to purchase coverage to protect them in the event of an accident caused by someone without insurance or with inadequate coverage. In states that require this coverage, a hit and run accident will automatically be covered by the insured’s own policy.

Rather than allowing accident victims to file lawsuits in civil court for medical expenses and other damages, the auto insurance companies involved agree to pay the bills through the customers’ no-fault riders. This is an immediate savings for consumers, as insurance companies are limited as to what they can charge their customers for this mandated coverage. Claims however are also limited, to the amounts of the mandatory coverage in each state.

It was hoped that these legal measures would reduce insurance premiums for most consumers, as well as help eliminate the myriad of lawsuits involving auto mishaps from already overcrowded American courtrooms. Both of these results were evident in the early years of the no-fault movement, but many states that originally legislated for no-fault have now returned to the more litigious tort system. From a high of 20 states in the mid 1970s, today there are but ten states remaining that still require no-fault coverage.

Like most other legal areas, laws that determine who will pay for damages for an automobile accident differ from state to state. Those states that have maintained or have gone back to a court based, tort system claim that court proceedings offer more choices for medical payments and can save the party paying out the claim substantial amounts of money.

What are the options in the states that still require some form of no-fault coverage?

Of the no-fault states, there are two distinct groups. First are the ten states that mandate no-fault coverage, preventing auto accident cases from going to court for resolution. Then there are states with hybrid laws, which permit, but don’t mandate, no-fault insurance riders to be added to auto policies in their jurisdictions. These states also allow for court resolution of injury/accident cases and set no monetary limits on these lawsuits.

Consumers who don’t report accidents and bear the costs themselves are forgetting the main reason that they have been paying their insurance premiums for a number of years. By the same token, car insurance companies often take advantage of consumers by pricing auto premiums higher and higher each year, whether justified or not.

The bottom line is that auto insurance is a commodity that most everyone must have. Insurance rules and regulations vary from state to state as do the companies that are licensed to sell insurance. Smart consumers should compare all available insurance options before making a final decision to purchase an auto policy or any other kind of insurance.

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