Your insurance company may be asked, after a motor vehicle accident, to cover three classes of loss:
- The cost of repair to your vehicle
- Incidental expenses such as the provision of a rental vehicle while your vehicle is being repaired
- Medical and or wage loss benefits under personal injury protection [PIP] coverage
The concern frequently raised by those injured at the hands of another in an automobile accident is that, if their insurance company pays for some or all of their losses, their premiums will go up, or they may be canceled outright. An insurance company can consider accidents in assessing rates or cancellation, but by law cannot consider a single PIP claim.
Damages to an automobile, or market value settlement of a total loss, is addressed under the collision coverage in a policy. Now, such claims would also be handled under the liability coverage of an at-fault person or driver. If both coverages exist, you may have an option of proceeding with one or the other. The advantage to using your insurance- your collision coverage- is often that of speed and convenience. However, you might have to pay, at least upfront, a deductible. There may be a delay as the liability insurance carrier investigates coverage and or liability issues, postponing the timely repair of your car.
In many instances securing compensation for out-of-pocket expenses as they occur, as opposed to at the conclusion of the case, is only possible by getting such reimbursement through your own carrier. For example if you have such coverage, it is often possible to obtain the use of a rental vehicle that the insurance company pays for directly while your car is being repaired. It may well be that such payments are the responsibility- ultimately- of the person to hit you. You may well have an identical claim against the person that caused the accident, but those claims can take years to resolve. That is of little solace if you are paying expensive car rental for an extended period.
Finally, I've seen many individuals over the years who are reticent to use their personal injury protection benefits. This is coverage for lost wages and your medical expenses up to the policy limits -typically $2,500. PIP or personal injury protection is first-party coverage for which you pay premiums. As noted, an insurance company could not use a singular PIP claim to affect your rates. There is no reason not to use this coverage after an accident.