Because car accidents are so common on the roads of Philadelphia and the rest of Pennsylvania, there is a state law that requires all drivers to have at least a certain amount of insurance in 2020. Not complying with this law can lead to a fine and a license suspension, so understanding what is required is essential. It can also help Pennsylvania drivers make an informed decision about their insurance coverage.
If you ever have an accident, making sure that the insurance company that you chose will cover what they have promised is not always easy. The personal injury lawyers at Gilman & Bedigian can help.
Auto Insurance Requirements in Pennsylvania for 2020
To drive legally in the state in 2020, Pennsylvania's Motor Vehicle Financial Responsibility Law requires that drivers have at least the following liability insurance coverages:
- $15,000 coverage for injuries per person
- $30,000 coverage for injuries per accident
- $5,000 coverage for property damage per accident
Additionally, the law requires drivers to have at least $5,000 in first-party insurance.
Anyone who has explored car insurance quotes has seen insurance companies providing these breakdowns. However, few companies explain what they mean.
What is Liability Insurance Coverage?
These dollar amounts are the minimum amounts of liability insurance coverage for a car accident. This insurance helps people that you hurt when you negligently cause an accident.
Liability insurance coverage is often called third-party insurance because it covers someone who is not included in the insurance contract that you sign with your insurance provider.
The law requires people driving in Pennsylvania to carry at least a minimum amount of third-party insurance because:
- It benefits innocent drivers who get accidentally hurt by your negligence, and
- Despite its value to society, most people would choose to lower their insurance premium payments and go without it, if they could
Coverage Per Person Versus Per Accident
The minimum amount of coverage per person guarantees coverage to a particular victim. The minimum coverage per accident is what all of the victims would have to split if there are multiple victims.
For example, if you have the minimum insurance coverage and accidentally cause a crash that totals the victim's $6,000 car and he suffers $10,000 in injuries, your insurance coverage would pay for all of his injuries and all but $1,000 of the property damage.
If there was also a pedestrian involved in the crash and that pedestrian suffered $75,000 in injuries, then the pedestrian and the other driver would have to split the $30,000 per accident coverage.
The Value of Carrying More than the State Minimum
These two examples highlight the value of carrying more than the Pennsylvania state minimum car insurance coverage. If you only have the state minimum coverage, the victims of a crash that you caused – even if it was just by accident – can try holding you personally liable for what the insurance company does not pay.
In the first example, you could have to pay $1,000 out of your own pocket for the property damage sustained in the crash. In the second example, with the hurt pedestrian, you may have to pay the $1,000 in property damage, plus the $55,000 in uncovered personal injury damages.
What is First-Party Insurance Coverage?
Pennsylvania law also requires all non-motorcycle drivers to carry at least $5,000 in first-party insurance coverage, which is also known as personal injury protection, or PIP. This type of insurance covers your losses in an accident, regardless of who caused it, up to the coverage limit.
For example, if you were in a car accident where it is unclear who was at fault, but no one was hurt and you only suffered $3,500 in damage to your car, your PIP coverage will cover it automatically.
In essence, PIP or first-party insurance coverage is required to make sure all of the minor accidents that happen in Pennsylvania are covered by insurance companies without the need to go to determine who was at fault. Drivers can increase their PIP coverage limit by paying more in their regular premiums.
There are Penalties for Not Carrying the Minimum Liability Insurance
Because forcing drivers to have at least some liability insurance to cover accidents ends up helping everyone, Pennsylvania law penalizes those who do not comply with the rule. Those penalties include:
- A minimum fine of $300
- A three-month suspension of your driver's license and your vehicle's registration
You will also have to pay to restore your license and registration. Each cost around $50.
Additional Types of Car Insurance Coverage in Pennsylvania
Drivers who want to make sure that they have enough insurance to cover their losses can also buy uninsured motorist coverage or underinsured motorist coverage.
As their name implies, uninsured and underinsured motorist coverage gives you, the policyholder, a source of insurance coverage when someone hits and hurts you but does not have enough insurance to pay for the damage.
For example, imagine you get hit by a car and the other driver was at fault. You have $10,000 in property damage and $100,000 in losses from your injuries because you were seriously hurt. The other driver, however, only has the Pennsylvania state minimum insurance coverage.
If you do not have uninsured or underinsured motorist coverage, you would only receive $5,000 for your car and $15,000 for your injuries from the other driver's insurance company. You would have to hold the other driver personally liable for the remaining $90,000 – an amount that they are unlikely to have on hand.
However, if you do have uninsured or underinsured coverage, you could turn to your own insurance company for that $90,000, or for up to your policy's limits.
Philadelphia Car Accident Lawyers at Gilman & Bedigian
Car insurance plays a role in every single crash in Pennsylvania. If there is enough insurance to go around, then the risk of having to pay for your own losses will drop precipitously. However, getting your insurance company to provide the coverage they promised they would provide is not always an easy thing to do.
The personal injury lawyers at Gilman & Bedigian can help. Contact them online.