Pennsylvania Motor Vehicle Financial Responsibility Law

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The Pennsylvania Motor Vehicle Financial Responsibility Law (PaMVFRL) defines an individual’s rights when injured in a car accident. Because no one plans on being injured in an auto accident, before purchasing automobile insurance, you should know how the law affects your right to receive compensation if injured in a car accident.

First Party Benefits

First Party Benefits are the insurance benefits you purchase to protect you, your household members and passengers in your vehicle. Your First Party Benefits include coverage for reasonable and necessary medical treatment resulting from a car accident and income loss if you are unable to work as a result of injuries suffered in a car accident. In Pennsylvania, when purchasing car insurance, medical benefits in the amount of $5,000 must be purchased. Higher benefit amounts may be purchased. Of course, if you chose to purchase additional medical benefits, your car insurance will cost more. Before making this decision you should take into consideration what other health care insurance you have available and the cost of increased benefits.

Uninsured and Underinsured Motorist Coverage

Another important coverage that you purchase for yourself, the members of your household and your passengers is Uninsured and Underinsured Motorist Coverage. Uninsured Motorist Coverage protects you if you are injured in a car accident and the driver who caused the accident does not have automobile liability insurance. You can also purchase Underinsured Coverage which will protect you if you are injured in an accident and the driver responsible does not have enough insurance to fully compensate you for your damages. Pennsylvania state law only requires a driver to carry $15,000 worth of liability insurance. So, if someone carrying only $15,000 in liability insurance injured you, your Underinsurance Coverage would protect you if the damages resulting from your injuries were more than $15,000.

Uninsured and Underinsured coverage are optional. You may reject purchasing this coverage. If you reject buying this coverage you should be required by your insurance agent or company to sign a waiver of this coverage. Before doing so, you should ask your insurance agent what the price difference would be if you agree to give up this important protection.

Uninsured and Underinsured benefits may also be “stacked”. The stacking of Uninsured or Underinsured benefits means that if you own multiple vehicles which are insured under one or more policies, the benefits may be multiplied by the number of vehicles. For example, if you carry $100,000 in Underinsured benefits and own two insured vehicles, there would be $200,000 in Underinsured benefits available. You can also waive the right to have these benefits stacked. By doing so, you should pay a lower insurance premium than someone who chooses to stack these benefits. Again, before deciding on whether to stack your Uninsured and Underinsured benefits, you should ask your insurance agent to provide you with cost comparisons.

Also, if you choose to just stack the benefits, you should read your policy language very closely. Even though Pennsylvania law seems to permit stacking of Uninsured and Underinsured in nearly all situations, the insurance companies have forced consumers to accept car insurance policies which may greatly limit your rights to recovery of these benefits. Two of the more common exceptions are the so-called “household exclusion” and “regularly non-used vehicle exclusion”. The insurance companies have convinced many Pennsylvania courts, in spite of the language of the PaMVFRL, that someone injured while the occupant of a vehicle owned by a household member or while in a regularly non-owned vehicle, such as a company car, should not be permitted to stack Uninsured or Underinsured benefits. They have successfully argued that in these instances, even when the injured car owner has paid an increased premium for “stacked” coverage, recovery should be limited only to the Uninsured or Underinsured benefit which covers the vehicle occupied at the time of the injury and that the benefits for which the injured party has paid his own insurance company should be denied.

Tort Option: Full/Limited Tort

Another important choice you must make when you purchase your car insurance is the tort option. In Pennsylvania, you must be given the choice of whether you purchase Full Tort or Limited Tort. Limited Tort insurance is supposed to greatly reduce your insurance premium and was supposed to result in lower insurance premiums for most Pennsylvania drivers. In exchange for this reduced premium, by purchasing Limited Tort insurance, you may give up your right to recover damages if you are injured in an accident. People who have purchased Limited Tort insurance may not recover non-economic damages, meaning damages such as pain and suffering, embarrassment or humiliation, unless they have suffered a “serious injury”.

Unfortunately, our lawmakers did not clearly define “serious injury” in the PaMVFRL. As a result, it has been left to the courts to decide on a case-by-case basis what is or is not a serious injury. This has lead to confusing, non-uniform and often unfair results. For example, Pennsylvania Courts have found that fractures which ultimately heal, herniated discs repaired with surgery and even unhealed injuries from a person is expected to fully recover are not “serious” injuries and have denied injured parties non-economic damages.

Like all decisions you must make when purchasing your car insurance, and because your rights may be greatly limited, you should carefully decide whether or not you should purchase Full Tort protection or agree to only Limited Tort coverage. In making this decision, you should ask your insurance agent for a cost comparison.

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