How to Protect Yourself When Buying Auto Insurance in Pennsylvania

Almost everyone has a car, and every car and truck registered in Pennsylvania must have auto insurance under the Pa. Motor Vehicle Financial Responsibility Law. But what many people don't realize is that when you buy insurance, you are protecting yourself in the case of claims against you and protecting yourself if you are injured by the negligence of someone else. YOUR MOTOR VEHICLE INSURANCE COVERAGE DETERMINES YOUR RIGHT TO BE COMPENSATED FOR PAIN AND SUFFERING, THE INJURIES AND LOSSES YOU SUFFER.

In this episode of The Legal Tech Podcast, Pennsylvania attorney Daniel J. Siegel explains what types of coverages are available, and explains what insurance you should purchase, including bodily injury coverage, uninsured motorist coverage, and underinsured motorist coverage. Most importantly, Dan Siegel explains why you should not purchase limited tort coverage, and should purchase full tort coverage, because the savings are so small that the rights you give up are worth far more than the minimal savings available.

This fact-filled podcast will help you be a better consumer when purchasing auto insurance. 

Transcript

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Welcome to the latest episode of the Legal Tech podcast. Today's episode will explore and explain what types of motor vehicle coverages are available and what types you should would purchase if you own a private passenger vehicle, a car in Pennsylvania, when you buy a car or a passenger vehicle, such as a pickup truck, you are required to have motor vehicle insurance. In Pennsylvania, there are a variety of coverages you are required to have. One of the most common where questions are asked is bodily injury liability coverage, often called bi coverage or personal liability coverage. And that's what you hear the most about when someone says to you, oh, I have a 100 $300 policy. What they really mean is that they have $100,000 per person and $300,000 per accident in coverage. In Pennsylvania, the minimum coverage that you can buy in an automobile insurance policy is what we call 15 $30 $15,000 per person, $30,000 per accident. And that's not really enough protection for you in the event that you cause serious injury. If you have such minimal coverage, you expose yourself to personal liability, where if you cause serious injury, the person you injured could theoretically come after your house or other property. Most people, especially if you own a home or have other assets, will buy larger amounts of coverage. Typically, they'll either buy a policy such as 100 $300 $100,000 per person and $300,000 per accident, maybe 250,000 $250,000 per person and $500,000 per accident or something like a $300,000 what they call combined single limits, which means in that accident, if you cause an accident, your coverage for the accident is $300,000 total. People think about that coverage because they think about how bodily injury coverage protects themselves. And that's important because no one wants to be in an accident. No one plans to be in an accident. And even worse, no one plans to or expects to get sued and, God forbid, lose their house or something else. So when you're buying bodily injury liability coverage, you are really concerned with protecting yourself. But what people don't always understand is there are two ways that that coverage protects you. The first is from claims against you the other way, which is often as important and in many cases far more important is when you buy bodily injury coverage. In Pennsylvania, you must either select limited tort coverage or full tort coverage, and we hear those terms explained a lot, but we don't always hear what they really mean, and that's important because it limited tort and full tort. As odd as this may seem, specify what your rights are in the event you're injured as the result of someone else's negligence. So when you're purchasing coverage to protect yourself, you're also purchasing coverage that determines your rights and what types of protections you have in the event you have a claim. As a result, under Pennsylvania law, for a Pennsylvania policy, your insurance policies provide for either coverage and purchasing one or the other is a financial decision. Generally speaking, you save about 10% when you purchase limited tort insurance. 10% isn't inconsequential, but when you think about what that really means, it can be significantly consequential. What I mean by that is simple. Suppose you were in an accident. You herniated a disk. You had months of treatment, but you didn't miss work. You're a hard worker. You're a loyal worker. Well, under the limited tort option, even though you suffered a herniated disk and maybe other injuries, you might not be allowed to recover, you could also break a leg. But in today's days of working remotely, you might not miss any time from work because you can sit at your kitchen table and do your job. That's another example. There are many, many examples like that where people suffer what you and I would think are serious injuries. But what are not serious injuries? If you purchase limited tort coverage, limited tort coverage means that if you are injured in an accident as a result of someone else's negligence, you are only allowed to recover pain and suffering what we call non economic damages. If you suffer a serious impairment of body function. In other words, it has to impair you significantly. Courts in Pennsylvania have applied that term very narrowly, which means that if you have limited tort coverage, you need to have very serious injuries in order to recover for your pain and suffering. Yes, you'll recover if you have any excess medical bills and you'll recover if you have any excess wage losses but pain and suffering, that's the compensation for everything that happened to you in your life as a result of the accident. If you think of your life as a straight line on a graph and then think of an accident and that line begins to waiver up and down and fluctuates, potentially for months or years with limited tort coverage. If you purchase that coverage and suffer an injury like a herniated disc, you could have a sprained ankle. You could have all kinds of different things unless they cause a serious impairment of body function, which means they prevent you from doing numerous activities of daily life for a significant amount of time, then you're not going to receive any compensation, likely from a jury, from an insurance company in a settlement or from a panel of arbitrators at a trial court. So as a practical matter, you have to think about that. So what happens if you purchase full tort coverage? Full tort coverage means that you are entitled to pain and suffering damages, regardless of how serious your injuries are. In other words, in theory, if you just stubbed a toe in the accident, you could be compensated for that. Although claims like that generally aren't worth pursuing. On the other hand, if you have a herniated disc, don't miss any time from work, but have a lot of pain and a lot of complaints. With full tort, you're going to be covered. And as I said, the difference between full tort and limited tort insurance is really non economic damages, pain and suffering. The money that compensates you for all that you have gone through. So you have to think about that very carefully. And when we talk about full tort coverage, you can recover regardless of your injuries. Yes, there are examples. For example, if the tort fees are the person who injured you was under the influence of alcohol and pleaded guilty and some other areas. But as a practical matter, the courts have interpreted limited tort to be a very serious bar against recovering any damages. So as a practical matter, you need to think about that when you are purchasing your insurance. The other area that's important when you're purchasing insurance is to determine whether you are going to purchase uninsured and underinsured motorist bodily injury coverage. These are coverages that only protect you. And one of the reasons that your bodily injury limits of coverage, the 1530 or 103 hundred that I mentioned are so important is because you cannot have uninsured, which we call UM coverage or under insured motorist coverage that exceeds your bodily injury coverage. Uninsured motorist coverage provides you with compensation for your pain and suffering. In the event the vehicle that causes your injury was uninsured, that means they didn't buy auto insurance. And there are lots of vehicles in Pennsylvania, particularly in the major cities that don't have auto insurance. It also means that if a vehicle strikes your car, causes you injury and leaves the scene and can't be identified, you are entitled to pain and suffering compensation through uninsured motorist coverage. So if you only have a very limited policy and you have an uninsured or UM claim, you might be very limited in the compensation that you receive. Similarly, underinsured motorist coverage protects you in the event that a vehicle causes injury but doesn't have sufficient injury to compensate you for your damages. In other words, suppose that a vehicle injures you you suffer very serious injuries, multiple fractures. You're out of work for a long time, but that car only has $25,000 in coverage. That's not enough to cover your injuries and compensate you. On the other hand, if, for example, you have $250,000 in insurance limits, well, then you can recover the $25,000 from the other party's policy and then pursue a claim against your auto insurance policy for the $250,000 additional coverage that's available through under insured motorist coverage and uninsured and under insured motorist coverage claims do not affect your rates. You're paying for them to protect you. In those situations, it's important to understand that when you purchase your insurance, you're going to purchase your bodily injury coverage. You can actually buy less uninsured or under insured motorist coverage than your bodily injury coverage, or you could waive it. We don't recommend that at all. You can also stack your coverage. So, in other words, if you have three cars insured under your policy and you have $250,000 in coverage. That means if it is stacked, you have up to $750,000 in coverage, which for a serious injury is a lot of compensation. But it's not unthinkable. And your uninsured motorist and under insured motorist coverages are bound by your limited tort selections. So if you select limited tort, even if you have a serious injury, but not one that meets the limited tort threshold, you won't be able to recover even against your own policy. So let's review this sort of primer on coverages you need to purchase from your auto insurance policies. Your purchase coverage bodily injury, uninsured and underinsured motorist coverage to protect you. Bodily injury coverage protects you from claims by someone else in the event that you caused them. Serious injuries, uninsured and under insured motorist coverage protect you in the event that a vehicle that injures you causes that injuries that are in excess of their policy limits or in the case of uninsured coverage, the vehicle has no insurance or leaves the scene and can't be identified. And then you can stack those coverages of uninsured and underinsured motorist coverage to purchase even greater insurance. Finally, it's the limited tort option that creates the problem. If you don't select full tort, you are again limiting your right to compensation for your pain and suffering to a serious impairment of body function. That term has been interpreted very narrowly by the Pennsylvania Supreme Court, and it can be confusing. It can be a bar that prevents you from recovering. Yes, we handle claims like that, and we are able to overcome the limited tort selection that our clients have made. But as a practical matter, the best thing you can do is to purchase full tort coverage. Yes, you might be saving 10% or somewhere in that range in insurance. But if you think about it that you're saving a couple hundred dollars a year and by saving a couple hundred dollars a year, you prevent yourself from receiving tens or hundreds of thousands of dollars in pain and suffering compensation. You understand that the trade off doesn't benefit you. It only benefits the insurance company. I'm Dan Siegel. This Podcast The Legal Tech Podcast, is sponsored by the law offices of Daniel J. Siegel LLC. You can find us at danieljsiegel. Com D-A-N-I-E-L-J-S-I-E-G-E-L. Com and Integrated Technology Services, which provides consulting services and technology for lawyers and law firms. We thank you for listening to this podcast and hope that you'll contact us. Our phone is 610 446-3457. Visit us on our website. We're happy to answer your questions. Purchasing auto insurance is important. We all drive cars, but the thing that's most important is it's protecting you. Your choice of your coverage protects you not only from claims, but assures that when you make a claim, you are fully compensated as well for your pain and suffering. Thank you for listening and have a nice day.