Sharon Price brought a lawsuit in the Philadelphia County Court of Common Pleas against State Farm Fire & Casualty Company claiming that she was wrongfully denied when she made a claim for underinsured motorist (UIM) coverage following a car accident. A pre-trial conference is now scheduled for June, with a trial expected to begin in July. She was involved in a collision with Paul Harmon where Price sustained injuries to her left shoulder and several discs in her back.
Harmon was also a State Farm policyholder with coverage of $15,000 per person and $30,000 per accident. State Farm paid out $30,000 in several claims after the accident; however, Price only received $7,500. Harmon's liability insurance coverage was insufficient to cover the costs incurred by Price. She then filed a claim under the UIM coverage on her policy that was denied to cover medical expenses that exceeded the coverage limitations. Her claim alleges that State Farm breached their contract and she is pursuing damages and fees that exceed $50,000.
Pennsylvania Auto Insurance Minimum Requirements
These minimum liability insurance requirements in the state have been the same since 1974:
- Liability coverage minimums are $15,000 per person for bodily injury, $30,000 aggregate per accident, and $5,000 for damage to property
- Uninsured (UM) and UIM coverage also of $15,000/$30,000 as above
- First party medical payments coverage of $5,000
It is important to note that motorists may opt out of UM and UIM.
With the rising costs of medical care, an accident that leads to severe injuries can easily exceed these minimum requirements. The state tries to maintain minimum liability amounts that they deem as sufficient without making auto insurance unaffordable. Motorists wishing to waive the UM and UIM coverage must do so in writing with a rejection form, but the insurance companies are mandated to offer it.
Accident Medical Expenses
Those injured in vehicle accidents are likely to rely on their medical insurance coverage through a private insurer, Medicare, Medicaid, etc. These entities are likely to benefit considerably if and when an increase is made to the minimum. First-party medical benefits are a Pennsylvania requirement for injury-related medical expenses. Auto insurance policies have a host of additional options that vary according to the carrier.
Full vs Limited Tort
The state has what are known as “full tort” and “limited tort” types of policies. A full tort option allows policyholders to pursue financial compensation for injuries that are the result of another at-fault driver without any restrictions. The policyholders and other members of the household may recover all costs of medical care; related expenses paid “out-of-pocket”, as well as noneconomic damages such as those for pain and suffering.
Limited tort policies are usually selected by those wishing to minimize the costs of their insurance premiums. You are essentially waiving your right to pursue noneconomic type damages. Limited policies do still allow those injured to pursue damages for the costs of medical care and any other applicable out-of-pocket costs. Policyholders selecting limited coverage must sign a formal waiver stating they understand the terms.