A PRIMER ON AUTOMOBILE INSURANCE
In 1990, the Pennsylvania Legislature changed the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”), the law that governs car insurance in Pennsylvania. In response to complaints that car insurance was too expensive, the Legislature gave consumers the option to reduce or drop coverage that had been required under the old law. In return for this reduced coverage, car owners got a reduction in their insurance premium.
The first time you had to renew your car insurance after the law changed, consumers got documents explaining these new changes. In many cases, consumers were required to sign forms or “elections” to select the types of coverages they wanted and “waivers” for coverages they did not want. Subsequent renewals did not require new elections and waivers and the previously selected coverages would renew unless a request for a change of coverage was made or unless you change insurance companies.
Even though this law has been in effect for 16 years, most people are still in the dark when it comes to the types of coverages they have. Often, it is only after they have an accident or a claim that the elections and waivers they made many years ago are fully explained to them. This is when many people learn they did not have the right kind of coverage. We now have a number of court decisions interpreting the law and the experience of working with this law since 1990.
Perhaps the most important choice consumers are given today is whether to elect the “Full Tort” or “Limited Tort” option. If you elect the Full Tort option, you pay a higher premium but you can make a claim for your injuries without regard to the seriousness of your injuries. Limited Tort, as the name implies, limits or restricts a persons right to make a claim for injuries. If you elect the Limited Tort option, you can only make a claim for pain and suffering (sometimes referred to “non-economic damages”) if you have suffered a “serious injury”. A “serious injury” is one that results in death, permanent serious disfigurement or a serious impairment of a body function.
Whether an injury is a serious impairment of a body function permitting a recovery for pain and suffering has been the subject of many court decisions. The recent Superior Court case of Long v. Mejia is helpful in explaining a serious injury. Mr. Long, a construction worker, injured his wrist in an accident. Because of this injury, he could no longer control tools like a jack hammer or a compressor. He could not lift anything over 35 pounds. The Court said that Mr. Long’s injury was a serious injury and he could be paid for his pain and suffering. In deciding whether a person has suffered a serious injury, the Court said it would look at not only the injury, but also how that injury has affected a person’s life and particularly his work. Mr. Long, a construction laborer, was unable to return to this type of work. Not everyone who suffers the same wrist injury as Mr. Long would have a serious injury under the MVFRL. The Court also used the example of a broken pinky finger. To most people it would not be a serious injury but, to a concert violinist or a neurosurgeon, it might be. The Court said that how an injury affects a person’s ability to work in his or her profession will determine if an injury is serious. The greater the impact on a person work life, the more likely the injury will be seen as a serious impairment.
If your injuries are not serious enough to overcome the Limited Tort threshold, you are still permitted to recover your “economic damages”. Economic damages usually consist of medical expenses, lost wages and property damage not covered by insurance.
Every automobile insurance policy must provide liability insurance. Liability insurance protects you if you cause an accident that injures another person. The lowest coverage permitted is $15,000 per person and $30,000 per accident (if more than one person is injured). This is commonly referred to as a 15/30 policy. Your insurance company is only responsible to pay out up to the limits of coverage you purchase and lower limits could expose you (and your assets) to judgments that are more than your coverage. Insurance companies must offer higher liability limits and they typically offer limits of 25/50, 50/100, 100/300 and higher.
Under the old law, all insurance companies had to offer Uninsured Motorist Coverage (UM) and Underinsured Motorist Coverage (UIM). UM coverage provides you with compensation
In 1990, the Pennsylvania Legislature changed the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”), the law that governs car insurance in Pennsylvania. In response to complaints that car insurance was too expensive, the Legislature gave consumers the option to reduce or drop coverage that had been required under the old law. In return for this reduced coverage, car owners got a reduction in their insurance premium.
The first time you had to renew your car insurance after the law changed, consumers got documents explaining these new changes. In many cases, consumers were required to sign forms or “elections” to select the types of coverages they wanted and “waivers” for coverages they did not want. Subsequent renewals did not require new elections and waivers and the previously selected coverages would renew unless a request for a change of coverage was made or unless you change insurance companies.
Even though this law has been in effect for 16 years, most people are still in the dark when it comes to the types of coverages they have. Often, it is only after they have an accident or a claim that the elections and waivers they made many years ago are fully explained to them. This is when many people learn they did not have the right kind of coverage. We now have a number of court decisions interpreting the law and the experience of working with this law since 1990.
Perhaps the most important choice consumers are given today is whether to elect the “Full Tort” or “Limited Tort” option. If you elect the Full Tort option, you pay a higher premium but you can make a claim for your injuries without regard to the seriousness of your injuries. Limited Tort, as the name implies, limits or restricts a persons right to make a claim for injuries. If you elect the Limited Tort option, you can only make a claim for pain and suffering (sometimes referred to “non-economic damages”) if you have suffered a “serious injury”. A “serious injury” is one that results in death, permanent serious disfigurement or a serious impairment of a body function.
Whether an injury is a serious impairment of a body function permitting a recovery for pain and suffering has been the subject of many court decisions. The recent Superior Court case of Long v. Mejia is helpful in explaining a serious injury. Mr. Long, a construction worker, injured his wrist in an accident. Because of this injury, he could no longer control tools like a jack hammer or a compressor. He could not lift anything over 35 pounds. The Court said that Mr. Long’s injury was a serious injury and he could be paid for his pain and suffering. In deciding whether a person has suffered a serious injury, the Court said it would look at not only the injury, but also how that injury has affected a person’s life and particularly his work. Mr. Long, a construction laborer, was unable to return to this type of work. Not everyone who suffers the same wrist injury as Mr. Long would have a serious injury under the MVFRL. The Court also used the example of a broken pinky finger. To most people it would not be a serious injury but, to a concert violinist or a neurosurgeon, it might be. The Court said that how an injury affects a person’s ability to work in his or her profession will determine if an injury is serious. The greater the impact on a person work life, the more likely the injury will be seen as a serious impairment.
If your injuries are not serious enough to overcome the Limited Tort threshold, you are still permitted to recover your “economic damages”. Economic damages usually consist of medical expenses, lost wages and property damage not covered by insurance.
Every automobile insurance policy must provide liability insurance. Liability insurance protects you if you cause an accident that injures another person. The lowest coverage permitted is $15,000 per person and $30,000 per accident (if more than one person is injured). This is commonly referred to as a 15/30 policy. Your insurance company is only responsible to pay out up to the limits of coverage you purchase and lower limits could expose you (and your assets) to judgments that are more than your coverage. Insurance companies must offer higher liability limits and they typically offer limits of 25/50, 50/100, 100/300 and higher.
Under the old law, all insurance companies had to offer Uninsured Motorist Coverage (UM) and Underinsured Motorist Coverage (UIM). UM coverage provides you with compensation
