Automobile Insurance Laws in Pennsylvania

All licensed motor vehicles in Pennsylvania are required to have insurance coverage.  The Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”) is designed to protect everyone who could be injured or could suffer a loss in the event of an automobile accident.  Minimum liability coverage is mandatory; however, there are a number of options to consider when purchasing auto coverage.  The type of insurance chosen has legal ramifications and can affect what happens to a driver, passenger, property owner or passerby in the event of a mishap.  The type of coverage individuals select depends upon their particular needs and budget.

Liability coverage is intended to protect all possible parties in the event of an accident.  When an accident occurs that has caused damage or injury to people or property, liability coverage is designed to compensate the injured party.  MVFRL requires a minimum coverage of $15,000 per individual and $30,000 per incident.   In the minimum instance, should more than two individuals be injured any one of them would be entitled to insurance proceeds of something less than $15,000.  All of them collectively would be entitled to an amount up to only $30,000.  Claims that exceed the policy limit expose the insured to personal liability.  As a result, higher limits are available and are recommended for individuals who have assets to protect.    When individuals are considering the amount of coverage they think will be necessary, they should consider limits that would be sufficient to cover their primary assets such as their home, savings, investments, and income.

In addition to liability coverage which applies to bodily injury claims, there is coverage available that is related to property damage claims. This type of coverage applies to damage caused to the property of others, including that of the Commonwealth, in an accident.  Liability coverage for property claims is applied to other damaged vehicles, damage to private property, loss or repairs to roads, telephone poles, and guard rails damaged in an accident.

First party benefit coverage is also mandatory under MVFRL. This is a basic no-fault type of medical insurance for an insured’s own medical bills. The minimum coverage required by law is $5,000.00. An insured’s initial medical bills resulting from an accident will be covered by this first party benefit regardless of who is at fault. The use of this first party benefit does not affect an insured’s premiums.  When the first party benefits are exhausted, any additional excess medical bills can be submitted to an insured’s health insurance or to the other driver’s carrier if that driver is at fault.  It should be noted that if health insurance coverage is tapped into to cover medical bills resulting from an accident, that health insurance company has the right to subrogate, or put a lien on any amount of money collected as a result of litigation or settlement to recover what it paid to the insured.

“Tort Threshold” is a choice for Pennsylvanians to consider.  The Commonwealth has followed several other states and enacted laws designed to keep automobile insurance rates affordable. Individuals who buy automobile insurance can select a “full tort” or “limited tort” policy.  A tort is a civil wrong; if I strike you without provocation, I have committed a tort and you are entitled to a recovery of damages.  Under a full tort policy an insured and all others covered by the policy are entitled to full legal rights (including a recovery for pain and suffering).  In the event of an accident or injury, a limited tort policy restricts those covered under it from recovering non-compensatory (pain and suffering) damages unless the injuries sustained are considered to be “serious”.  Courts have defined serious injury as a personal injury resulting in death, serious impairment of a bodily function, or permanent or serious disfigurement.  Naturally, full-tort and limited-tort policies differ in price.

Collision and comprehensive coverage is optional.  Such coverage pays for repairs or replacement of a vehicle, regardless of fault.  Whether it is damaged by wreck, fire, flood, hail or in some instances, even if the car is stolen, collision and comprehensive coverage protects the insured in the event of damage or loss of his or her vehicle.  Usually collision and comprehensive carry some sort of deductible.  The cost of the insurance will be directly related to the amount of the deductible.

 Another policy consideration is Uninsured or Under Insured Motorist coverage (“UMUIM”).  UMUIM is designed to protect an insured in the event he or she is injured by a driver and/or vehicle that is uninsured or has the minimum limits.  UMUIM coverage may be purchased in amounts equal to or smaller than liability coverage.

Like most things in life, the more policy options purchased by consumers of insurance, the higher the premiums.  It should be noted that when an insurance company pays a claim resulting from an accident the carrier can raise the annual premiums or attach a surcharge to the insured’s premiums.  Certain rules apply to how and when rates can be raised and surcharges applied.  If you have been in an accident and want to know how your coverage will affect you, contact our office for a consultation.
 J. Ken Butera


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