You may not know it, but the choices that you make when you buy car insurance govern many of your legal rights and your access to compensation for injuries or damages after a car accident.

As a 20-year Personal Injury lawyer, I’ve seen clients make many mistakes in their car insurance choices. So, here is a Lawyer’s Guide to Purchasing Car Insurance.

Liability Bodily Injury/Property Damage Coverage

Bodily Injury/Property Damage Coverage protects you from legal claims if you cause an accident. Under Pennsylvania law, you are required to carry Bodily Injury Liability Coverage of at least $15,000 per person/$30,000 per accident. With this minimal coverage, you are covered up to $15,000 for injuries to each person, up to a cap of $30,000 for injuries to multiple persons in an accident. In addition to Bodily Injury Coverage, you are also required to have coverage of at least $5,000 for Property Damage in any one accident to cover damages to other vehicles, fences, signs, houses, or other property you might damage.

I recommend that you carry substantially more than the minimum coverage because, if you cause a serious accident, $15,000 for any one person and $30,000 total for any one accident would be insufficient to satisfy the claim for Bodily Injury. Similarly, a Property Damage claim could easily exceed the $5,000 minimum coverage.

In the event that either Bodily Injury or Property Damage Coverage is exceeded, the people injured in the accident can sue you and try to collect from your personal assets to recover their damages which are in excess of your insurance. For example, if you only have a $15,000/$30,000 policy and cause $100,000 of Bodily Injury to one person, you can be sued personally for $85,000 of damages. As such, it is important to consider purchasing more than the minimum coverage from your insurance provider. People with moderate amounts of assets should purchase Bodily Injury protection of $100,000/$300,000, and high asset individuals should buy more. You should also consider obtaining an Umbrella Insurance Policy, which provides additional liability coverage of $1,000,000 or more above and beyond the coverage provided in your car insurance policy.

First Party Coverage – Medical Bills, Lost Income, and Death Benefits

First Party Coverage protects you regardless of who is at fault for an accident and covers medical bills, lost wages, accidental death, and funeral expenses.

Pennsylvania law requires you to carry at least $5,000 of medical coverage so that, in the event you are injured in an accident, your policy will cover your medical treatment. With car insurance, unlike health insurance, there are no deductibles or co-pays for medical treatment. Since it is easy to foresee a situation in which medical bills could exceed the $5,000 minimum coverage, it is advisable to consider having more than the minimum medical coverage, especially if you have no health insurance or high deductibles or co-pays in your health insurance plan.

First Party Lost Wage Coverage is not mandatory, but can be purchased. Lost Wage Coverage often pays 80% of lost gross income up to a maximum monthly amount and maximum benefit amount. Purchasing Lost Wage Coverage is wise, particularly if you have no other short-term or long-term disability coverage.

Accidental Death and Funeral Benefits, again, while not mandatory, are other types of optional coverage worth considering when purchasing automobile insurance. They are paid regardless of who is responsible for the accident. Accidental Death and Funeral Coverage can be very beneficial to your family, particularly if you have little or no life insurance.

Choose Full Tort Not Limited Tort

Pennsylvania’s Motor Vehicle Financial Responsibility Law provides the consumers purchasing automobile insurance must make a choice of tort options – either Limited Tort or Full Tort. Although your insurance costs are lower if you select Limited Tort rather than Full Tort, you sacrifice legal rights by choosing Limited Tort.

Full Tort is an election made on your automobile insurance policy which allows you and the members of your household to seek compensation for economic and non-economic damages sustained in a motor vehicle accident which was the fault of another driver. Economic damages would include things like unpaid medical bills and lost wages. Non-economic damages would include intangible damages such as compensation for pain and suffering and emotional distress.

Limited Tort is an election made on your insurance policy which allows recovery for economic damages, but usually prohibits you from making any claim for non-economic damages except if you suffer a “serious injury.” The law defines “serious injury” as “a personal injury resulting in death, serious impairment of a bodily function or permanent serious disfigurement.” Although the term “death” is self-explanatory and determining what constitutes “permanent serious disfigurement” is not too difficult, the Pennsylvania courts have struggled with the issue of what qualifies as a “serious impairment of a bodily function.” To date, the courts have been reluctant to find that a “serious impairment of a bodily function” exists absent a long-lasting and seriously disabling injury. Consequently, if you have selected Limited Tort, it is often very difficult to pursue a claim for non-economic damages, even for injuries which linger on painfully for months.

Choosing a tort option – Limited Tort or Full Tort – is an important decision because it has a substantial impact on your legal rights when you are involved in an auto accident caused by another driver. Choosing Limited Tort allows you to save on insurance premiums, but usually precludes you from recovering non-economic injuries unless the accident causes very serious, long-lasting injuries. The Full Tort option is more expensive coverage, but you do not waive any legal rights to seek compensation for injuries.

Uninsured/Underinsured Coverage

In the event that you are involved in an accident caused by a driver with little or no insurance, it is likely that you will need to turn to your own automobile insurance policy to get fair compensation for your injuries and damages. In such situations, you are protected if you have purchased Uninsured and Underinsured Motorist Coverage.

Uninsured Motorist Coverage provides protection for accidents caused by a driver of a vehicle who has no insurance or who leaves the scene and cannot be located – a hit-and-run driver. Underinsured Motorist Coverage provides protection for accidents caused by a driver of a vehicle who has liability insurance, but not enough coverage to pay for the damages resulting from the accident, such as medical bills, lost wages, and pain and suffering.

In Pennsylvania, all automobile insurance companies must offer both Uninsured and Underinsured Coverage and must obtain signed waivers if it is rejected. Since Uninsured/Underinsured Coverage is very important to have to protect you from drivers with little or no liability coverage, it is advisable to carry at least $100,000 of coverage, if not more.

In addition to choosing the amount of coverage, you are also given the option to “stack” such coverage if you insure more than one vehicle on your policy. For example, if you “stack” $100,000 coverage on a policy covering three automobiles, you will have $300,000 of available coverage if you are a victim of an accident involving an Uninsured or Underinsured driver ($100,000 per vehicle x 3 vehicles = $300,000). Because “stacking” coverage is relatively inexpensive, it is often a good idea to consider it for multi-vehicle policies.

In the event that you, or a relative who lives with you, are involved in an accident caused by an Uninsured or hit-and-run driver, you are able to seek compensation for your damages (medical bills, lost wages, and pain and suffering) from your own Uninsured Coverage. Your recovery can be up to the amount of your coverage. In addition, if you, or a relative who lives with you, are injured by a driver who does not have enough insurance to cover the damages, you can file a claim for Underinsured benefits to make up the difference between the amount of insurance the responsible driver has and the amount of your damages. For example, if the responsible driver has $15,000 of coverage and your damages are $100,000 and you have $100,000 of Underinsured Coverage, you would be paid $15,000 from the other driver’s policy and $85,000 from your own coverage.

Tim Rayne is a Car Accident Personal Injury Lawyer with the law firm of MacElree Harvey. Tim has offices in West Chester and Kennett Square and is available to answer any questions that you may have regarding car insurance issues or accident claims. Contact him at 610-840-0124 or [email protected], or check out his website at timraynelaw.com.

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