What’s the RIGHT Motor Vehicle Coverage in PA?
Every insurance company wants to sell you insurance. It’s how they make their money. But what types of optional motor vehicle insurance should you purchase? To answer that question, you must balance the risks of litigation against the cost of insurance. The information below should help you navigate what insurance you definitely should have, to avoid likely losses and/or foreseeable courtroom disputes.
Four Main Types
There are four main types of motor vehicle insurance coverage: (A) coverage payable to you, in the event of some event, (B) money payable to someone else, for your liability, for harm or damage that you allegedly caused, (C), coverage that lets you bring a claim for pain and suffering, or “full tort,” and (D) Commercial coverage — which you need if you use your vehicle for profit, otherwise you’ll have zero coverage.
Let’s talk about coverage that pays you, first.
A. Coverage Payable to You
Your motor vehicle policy will cover certain claims by you for damage to your vehicle or for your injuries. This is money you get regardless of fault — or, if another party is at fault but does not have adequate insurance, your own carrier pays you directly.
1. Medical or PIP Coverage
In Pennsylvania, everyone with motor vehicle insurance coverage has $5,000 in “no fault” medical coverage. This is important, because it covers you even if you have no health insurance. Plus it never needs to be paid back.
If, for example, you are injured in a car accident and receive 100K from the responsible party, you never need to pay back your insurance carrier for the PIP coverage paid to you. PIP also covers you when you are injured as a pedestrian, riding your bicycle when injured in a car or truck accident.
Exceptions
Motorcycles are an important exception. There, if you are riding a motorcycle, there is zero no-fault medical or personal injury protection. Some policies also have exclusions for e-bikes (electric bikes) or e-scooters (electric scooters), or other two or three wheeled vehicles. If you have a vehicle with fewer than four wheels, you will want to contact your insurance company and understand the PIP limits or exclusions. You definitely want to contact your motor vehicle insurance carrier before operating an electric bike or electric scooter anywhere near a roadway. Click here for more information.
2. Damage To Your Vehicle
You can also get “comprehensive” coverage for your vehicle, which pays you for damage to your vehicle, minus your deductible or depreciation, depending on the language of your policy.
3. Lost Wages
This is optional. It covers you for your lost wages from a car accident. It is “primary,” meaning, you have to exhaust this coverage before going after the party who caused the accident for “lost income.” If you are self-employed or are paid inconsistently — making it difficult to ascertain your exact lost wage from an accident — this coverage will have less value. It only covers actual, objectively provable lost income.
4. Uninsured (UM) or Underinsured Motorist Coverage (UIM)
This coverage is very important. It covers you in the event that you sustain injuries in a car accident, but the other driver has either no liability insurance to cover your claim (UM), or has insufficient coverage to pay the value of your claim (UIM).
So, for example, if you sustain major injuries in a car accident, requiring $50,000 in medical bills, lost wages. You have lost wage coverage of your in the amount of $5,000 plus $5,000 in PIP (no fault) medical coverage. Plus you have a claim for pain and suffering. There, the negligent driver should have at least $100,000 to cover the full value of the claim but he either has no insurance, (creating a UM situation), or only the state minimum of $15,000 liability coverage (discussed below).
In each case above, the negligent driver’s coverage is woefully inadequate. Unless you have UM or UIM coverage, you will be greatly under-compensated for your injuries and damages. Granted, you can sue the negligent driver anyway, but he’s too irresponsible to get adequate liability insurance, he will likely be unable to pay a judgment you get against him.
Debt Collection Against Other Drivers – Driver’s License Suspension
An unsatisfied judgment against someone for causing a car accident can suspend their driver’s license. However, some irresponsible drivers won’t care. Or, they will lack assets to pay the judgment, regardless.
Suffice to say, both UM and UIM are a good idea to have in Pennsylvania. Claims against your own insurance carrier are usually easier for your lawyer to advance than a claim on another driver’s carrier. This is because your insurance carrier had special duties to you to act in good faith. This is explained here.
Thus, even though UM and UIM are “optional,” our litigation attorneys can tell you, these should be mandatory.
Lastly, on the topic of UM/UIM, make sure your insurer will provide coverage to the vehicle you are operating. For example, on a bicycle, you will likely have UM/UIM coverage if hit by a car. That said, it might be different if you are operating a scooter or three wheeler. Check with your carrier before operating any such vehicle on the streets.
B. Coverage Payable to Others
This is liability insurance: it pays others for damages you cause on the road, for such things as property damage (to vehicles or structures) or physical harm to others, causing them to need medical attention or miss work.
As mentioned, in Pennsylvania, the state minimum is $15,000 for liability coverage, but you should never carry only the state minimum. As mentioned, an unsatisfied judgment against you — for causing a motor vehicle accident — will automatically suspend your driver’s license. This suspension will remain until you pay the judgment or work out a payment plan through the Commonwealth of Pennsylvania. Debt collection can occur against your personal assets, for any unsatisfied judgment in PA.
C. “Full Tort” – Allowing You to Sue For Pain and Suffering
The right to sue for pain and suffering from a car accident in Pennsylvania can be waived very easily. This occurs when you elect “limited tort” on your motor vehicle insurance policy. You are also deemed “limited tort” when your relative or household member (whose policy covers you on the road) has made the “limited tort” election.
Only Pennsylvania, New Jersey, and Kentucky have this “limited tort” concept, allowing waiver of certain rights. In essence, limited tort determines whether you can sue for pain and suffering
The concept of limited tort is explained elsewhere on this blog, but suffice to say, you should always elect the limited tort option. It will only raise your insurance premiums between $80 to $150 per year, but the value of a claim for pain and suffering — even in a simple car accident case — can be $8,000 or more. There are few exceptions to limited tort, which our Pittsburgh litigation attorneys are experts at navigating, but when given the option, you should always elect “full tort” on your motor vehicle insurance.
D. Commercial Use – Using Your Vehicle For Profit? – STOP!
This is last but not least. If you use your motor vehicle for profit — Uber Driver, Uber Eats, Pizza Delivery, or even running office errands — BEWARE! Your insurance carrier can deny all coverage during driving for profit, if your policy is purely “personal” without any commercial coverage — which is most policies.
So let’s say, for example, you have full coverage for loss wages and uninsured motorist coverage, but you are hit and seriously injured by someone having no insurance. If you were using your personal car for personal use. No problem. However, if you were making an Uber Eats or Pizza delivery, you might have serious insurance coverage problems. Many in that situation — having only personal coverage — receive a denial of coverage from their insurance carrier.
Solution: it is easy to add commercial coverage to any personal policy. Simply tell your carrier that you occasionally use your vehicle for commercial purposes, and make sure this is incorporated into your policy, which is also simple. This will not significantly increase your premiums.
Conclusion
Insurance is a contract between the insured and the insurance company. It is always best to understand your contract before you need to use it. Litigation is not the time explore your coverage for the first time. Our Pittsburgh attorneys are here to assist with nearly any litigation matter.
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