When clients have been in an automobile accident and call us, one of the first questions we ask of them is -"What coverage do you have?" Quite frequently the response is "Oh, I have "full coverage!"
When we ask what "full coverage" they have, they very frequently have no idea as to the levels of liability insurance, the levels of underinsured and uninsured, whether they have "full tort" or "limited tort" or "stacking"; moreover, if they do have such coverages they do not understand what these coverages mean and the effect of having such coverage.
The Pennsylvania Motor Vehicle Financial Responsibility Law mandates that all drivers in Pennsylvania who own registered vehicles must have a bare minimum of liability insurance to cover personal injury for any one individual, $15,000 and $30,000 to cover personal injury for any one accident, and $5,000 medical insurance to cover injuries received by the insured in any one accident. This is very minimal coverage.
The liability coverage only protects others for your own negligence and the $5,000 first party medical coverage only pays your medical bills to that amount. It's been our experience over the years that many accidents are caused by either minimally insured individuals or uninsured individuals. Therefore, it is extremely important that people are aware that if they want to have coverage to protect themselves, they must take out uninsured motorists' coverage and underinsured motorists' coverage for themselves and their families. This type of coverage is relatively inexpensive and certainly should be purchased if your goal is to protect yourself and your family from the terrible consequences of a serious automobile accident. Without attempting to give an exhaustive
or complicated explanation of all the benefits that we would recommend to our clients for their auto policies, we do believe the following are extremely important and should be considered:
1. "Full Tort" versus "Limited Tort" -while it is true there is some premium savings by electing limited tort rather than full tort, it has been our experience that people never receive adequate compensation when they have elected limited tort. A person can recover noneconomic damages with limited tort if they are killed, sustain permanent serious disfigurement, or sustain impairment of body function. The problem is that the courts have construed the term "serious impairment of body functions" very narrowly so that it quite often would not cover broken bones, may not cover ruptured discs, concussions, contusions, abrasions, lacerations or any other of a number of physical injuries which might incapacitate a person for months and yet not result in a "serious impairment of body function". Additionally, if you have limited tort, this creates a jury issue and a bargaining point for the insurance adjuster who would be handling your claim, and in today's climate, when the public has been led to believe that there are too many lawsuits and too many claims, one does not want to give the insurance company any additional points to argue if that can be avoided.
2. "Underinsured" and "Uninsured" coverage - This coverage is extremely important because this is the coverage that actually protects you and your family from irresponsible and negligent drivers. Keep in mind that our experience is that drivers who cause accidents are either minimally insured ($15,000 of liability coverage per person, $30,000 per accident) or have no insurance whatsoever. Therefore, if you do not have underinsured and uninsured coverage, and you or your family is injured at the hands of some minimally insured person or uninsured person, you have no source of recovery whatsoever. We have seen many cases where people have been killed or horribly injured by a drunken driver who has either $15,000 of coverage or no coverage whatsoever, and the families are simply out of luck in terms of recovering from anyone or trying to carry on their family obligations and financial affairs. This can be particularly devastating if the wage earner is gone, and the family is suddenly left with no income or funds to carry on.
3. "First Party" Medical Coverage - A very valuable coverage for you to have, if you can afford it, is first party medical coverage over and above the $5,000 mandatory coverage that you are required to have. This coverage is designed to pay quickly and to pay all medical expenses arising out of a motor vehicle accident, as well as other types of dental, surgical, psychological, nursing services or vocational services and occupational therapy. You can even purchase extraordinary medical benefits coverage which would cover medical expenses in excess of $100,000. This coverage is extremely important if you do not otherwise have good medical insurance.
4. "Income Loss" Coverage - Another type of coverage which you can purchase is income loss benefit. This is very important, for if you are seriously injured in an automobile accident or incapacitated for a period of months, you will have no source of income during that period of time. It may be that you have a claim against the individual who injured you if he or she was the negligent party causing the accident, (and if that individual had adequate insurance coverage) but the claim process takes time, and, invariably, it is met with resistance if the injuries are serious. Income loss coverage could provide you with a steady flow of funds sufficient to pay the mortgage, utility bills and so on until such time as you are able to return to work. In the situation of a totally disabled person, it would provide some income for a period of time until application can be made for Social Security disability or a lawsuit could be pursued against the responsible party. The foregoing is just a brief analysis of the more important aspects of automobile insurance coverage under the Pennsylvania Financial Responsibility Law. We cannot overemphasize how important it is to obtain the appropriate coverage to protect yourself and your family. While we all certainly hope you never have to use it, if you do, proper coverage is essential. We have seen many people in tragic situations where we are simply not able to help them because they do not have proper coverage.