Auto Insurance in Pennsylvania

There are over 120,000 miles of roads and highways in Pennsylvania and these roads weave their way in, out, and around cities and countryside. At one point you could be circling Philadelphia and the next minute you could be passing cows in Amish country, which can make driving in Pennsylvania particularly interesting. Unfortunately, driving in Pennsylvania can also be dangerous because you aren't the only one on the road. In addition to you, there are heavy trucks, cyclists, pedestrians, drunk drivers, distracted drivers, and deer, to name a few. All these things and people can make driving hazardous and accidents a possibility. In fact, in 2016 there were as many accidents in Pennsylvania as there are miles of roads, but to be exact and according to Pennsylvania Department of Transportation (PennDOT), there were 129,435 reportable accidents, and 82,971 people were injured in those accidents.

If you are in a car accident, you could face numerous expenses from the costs of property damage repairs to medical bills for treatment of injuries. As if those expenses were not enough, there is the potential for collateral costs: you may not be able to work for a certain period, you may have to rent a car, or you may suffer from emotional distress. If all of these costs have to be paid directly from your pocket, then that could be a serious financial burden for you and your family, which could easily escalate into something much worse, depending on the circumstances.

This avalanche of financial and emotional costs that an auto collision poses is reason why auto insurance is required in almost all states, including Pennsylvania. This article provides basic auto insurance requirements, an understanding of the claims process, and other relevant information that a person registering and operating a vehicle in Pennsylvania should know.

Minimum Auto Insurance Requirements in Pennsylvania

 

If you have a vehicle registered in Pennsylvania, it cannot be operated unless you have auto insurance coverage for it. This coverage should include the following minimum amounts:

  • Bodily Injury Liability Coverage: $15,000 per person or $30,000 per accident;
  • First Party Benefits Medical Payments: $5,000; and
  • Property Damage Liability Coverage: $5,000.

Bodily Injury Liability Coverage. This coverage is liability insurance that protects you in the case you were at fault for the accident and the other person files a claim against you and your insurer. Sometimes insureds are confused with regard to the $15,000 per person or $30,000 per accident, but what this simply means is that if in a auto collision, then if one person is injured in the other vehicle, that person has up to $15,000 available to him or her for the costs to treat any personal injuries emanating from the accident. On the other hand, if more than one person is injured, then the total allowable amount available to cover the costs for the treatment of all injuries is $30,000. For example, if there are 3 people injured and medical costs are at least $10,000 for each person, then each person would be provided $10,000 each to help cover the costs, but not more than $30,000 in total. Again, this is liability insurance, thus, it only applies to the other party in the case that party files a claim or lawsuit. Higher minimums are available for purchase at an additional cost because, as you may know, this amount would barely cover the costs of first responder/ambulance expenses, let alone additional treatment and/or therapy.

First Party Benefits Medical Payments. This coverage is unique to Pennsylvania. "First party" refers to the policyholder, and the coverage acts in many ways as personal injury protection. The coverage can be used by the driver, anyone named on the policy, or passengers, regardless if the driver was at fault or not for the accident. The $5,000 minimum is the maximum that will be paid per incident, per person. If, for example, there are two persons injured in the policyholder's vehicle, they can receive up to $5,000 each. Higher minimums are available for purchase at an additional cost.

Property Damage Liability Coverage. This coverage is also liability insurance that protects you in the case you were at fault for the accident and the other person files a claim against you and your insurer. It covers the costs of any property damage up to $5,000; it does not cover damage to the policyholder's property. As in the other two forms of coverage above-mentioned, you can also purchase more property damage coverage for an additional cost.

Uninsured/Underinsured Motorists in Pennsylvania

Uninsured and underinsured motorists and motorist protections are all separate concepts, but concepts that must be understood in order for you to better protect yourself if ever in a car accident in Pennsylvania. 

Uninsured Motorists. Uninsured motorists are motorists in Pennsylvania who do not have proof of insurance. At the time of vehicle registration, you must provide proof of insurance, or else registration will not be completed. There are instances where outside drivers are uninsured but driving within the borders of Pennsylvania. There are also instances where Pennsylvania residents will drive unregistered and uninsured vehicles. If you drive without proof of insurance and are pulled over by an officer for a traffic stop or if you cause an accident, you will be cited for having no insurance. The penalty can be costly and will include various fees/fines and suspensions of vehicle registration and driver's license (generally three months each).

Underinsured Motorists. Underinsured motorists are motorists who (1) are at-fault for the accident; and (2) have, at the least, the required minimum insurance coverage, but that coverage is not enough to cover all the costs of the victims of the accident and their respective medical bills and other expenses emanating from the accident.

Uninsured/Underinsured Motorist(UM/UIM) Coverage. This coverage is a means to protect you and your loved ones if in an auto collision. UM/UIM coverage must be offered by auto insurance companies in Pennsylvania, but it is an optional form of coverage that the policyholder can choose to add on to the policy. UM/UIM covers the policyholders, relatives residing in the same household, and any passenger in the car at the time of the accident. UM coverage is applied when you are in a car accident caused by a hit and run driver, or an at-fault motorist who has no auto insurance. The UIM coverage is applied when the at-fault party has insurance, but the insurance coverage is not enough to adequately offset the total costs of the property damage and/or personal injuries. When either of these circumstances occurs, and if you have the respective coverage, then you can receive the monetary benefit up to the amount necessary to cover all costs and in accordance with your policy amount.

Pennsylvania's No-Fault/Fault System

Most states are fault-based auto insurance systems, while a minority of states follow the no-fault system. A fault-based system allows a person to file a claim against the at-fault party(s) to recover applicable damages, including pain and suffering, while a no-fault system generally does not allow a person to file a claim against the at-fault party, except when extraordinary circumstances are present, and almost never allows recovery of pain and suffering damages.

In Pennsylvania, things are a little different. Pennsylvania's system is more accurately known as a "choice no fault" system. When a driver purchases auto insurance in Pennsylvania, at the time of purchase, he or she will have the choice to either opt in or opt out of the no-fault system. The two choices are ultimately a choice between limited tort (opting in) or full tort (opting out), and you must make that choice at the time you purchase auto insurance, not at the time of the accident.

Limited Tort. Limited tort means opting into the no-fault system. As such, you as the policyholder cannot sue an at-fault party, except in limited cases; you must make a claim with your own insurance provider. The recoverable amount is directly related to the amount of first party benefits you purchased (a minimum of $5,000 required by state law), and it is generally applied to the following expenses:

  • Medical bills for diagnosis, treatment, therapy, etc.; and/or
  • Lost wages, if you missed work due to treatment and recovery of the injury.

Under the limited tort option, you will not be compensated for what's known as noneconomic damages: emotional distress, or pain and suffering. There are exceptions to this rule, but they are very limited and do not apply in most auto collision cases.

Though policyholders who opt for limited tort insurance are restricted with respect to how much compensation he or she can expect to recover in an auto collision, there is one main advantage: lower premiums. The limited tort option is attractive because policyholders can save money; premiums are much cheaper than premiums associated with full tort auto insurance.

Full Tort. Full tort means you opted out of the no-fault system. This option carries with it all the rights a driver has when in a car accident and the cause of the accident is another driver, entity or environmental situation. The driver and/or passengers have the right to file a claim and/or lawsuit against any and all at-fault party(s). Compensation can include economic, non-economic, and, to a lesser extent, punitive damages.

How the Claims Process Works in Pennsylvania

There are two claims processes: first party claims and third party claims. First party claims are claims made to your own insurance provider. Third party claims are claims made to the at-fault party's insurance provider. Though the recipient of the claim may be different, both processes are generally the same at the beginning of the process then diverge with noted differences in the below sequence of events.

  1. Contact with the insurance company. Regardless if you are filing a first or third party claim, you should contact your own insurer. On your proof-of-insurance card, there will be a contact number. Call the number as soon as possible to report the auto accident. You should provide the insurance company details of the other driver, including name, contact information, driver license number, and insurance information.
  2. Claims Adjuster Assignment & Investigation. As soon as you report the accident, a claims adjuster will be assigned to your case and will begin the investigation.
    • For full tort policy-holders filing third-party claims, there is one caveat: the insurance provider of the at-fault party may request a statement; do not provide a statement. There is no legal authority in Pennsylvania that requires you to answer questions from or provide a statement to the third-party insurance company. The information you provide can and likely will be manipulated and used against you. If the insurance company can allege that you were partially responsible for the accident (e.g., you were on the phone at the time of the accident), then the recoverable amount to you can be reduced to reflect your contribution to the accident.
    • For limited tort policy-holders, (1) after you provide proofs of loss of wages and medical treatment/bills; and (2) upon receipt of the latter, your insurance company has 15 working days to accept or deny your claim or advise, in written form, why it requires more time before accepting or denying the claim.
    • For limited or full tort policyholders, insurance companies must complete investigations into claims within 30 days of receipt of notice. If not, then it must provide written notice why the investigation is not completed. Every 45 days thereafter, the insurance company must provide the same notice of explanation and provide a date when it expects the investigation to be completed.
  3. Payout for First-Party Claimants. If you made a first-party claim and if the claims adjuster accepts the claim, your insurance company will make payments for your medical expenses and/or lost wages in accordance with your policy. Sometimes, depending on the circumstances, the entire payout will be made upon an executed release form.
  4. Settlement Negotiations for Third-Party Claimants. If you made a third-party claim, then the insurance company will make an offer either before or after you provide a demand letter. In either case, you can accept or respond with a counteroffer. If negotiations break down, a lawsuit may be filed.
  5. Lawsuit for Third-Party Claimants. If the parties cannot agree on a settlement, the third-party claimant, who had opted for full tort insurance, can file a lawsuit. Note that limited tort insurance policyholders can, under several exceptions, file a lawsuit for full compensation of all economic, non-economic and, if applicable, punitive damages. Contact Gilman & Bedigian to determine if any of these exceptions apply to your case.

Claims Adjuster v. Attorney: their Respective Roles

The role of the claims adjuster can take on two faces: an official one and an unofficial one. In its official capacity, a claims adjuster is assigned to a claim, and in that role, he or she is to evaluate, investigate and determine, based on the evidence, who is at fault and what kind of compensation is appropriate. In its unofficial capacity, a claims adjuster works on behalf of the interests of the insurance provider, and the primary interests of the insurance provider is the bottom line. The claims adjuster is trained to identify ways to limit a payout to either a first- or third-party claimant because payouts are the number one threat to the insurance provider's bottom line.

The role of the attorney is quite different. The attorney is retained by the claimant, and in that capacity has the claimant's interests as the attorney's primary concern. An attorney will also evaluate, investigate and determine fault and what kind of compensation is just and fair. An attorney's role also includes negotiating a better compensation package for his client and preparing for trial if the claims adjuster and attorney do not agree on damages. An attorney works in his full capacity as an administrator of justice when representing clients before auto insurance companies to ensure a client receives the best possible settlement or verdict.

If you or your loved ones have been involved in a car accident and are worried about your rights and compensation, you need experienced, resourceful attorneys who will fight for your rights. Contact Gilman and Bedigian, LLC today to let us review your case and begin the process of investigation and recovery of compensation.

Let Us Help

If someone you are close to has been seriously injured or worse, you are naturally devastated not only by what has happened, but by the effect that the injury or loss has had on you and your family. At a time when you're vulnerable, traumatized and emotionally exhausted, you need a team that will support you through the often complex process that lies ahead.

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