BASIC PRINCIPLES

In Pennsylvania, the Motor Vehicle Financial Responsibility Law governs the basic principles of automobile insurance. While the law requires that you maintain certain minimum insurance, your policy may afford you more than that minimum. Your "liability" coverage is insurance you purchase to pay for injuries you may cause other people by your own negligent driving. Someone you may accidentally injure, or whose car or property you might accidentally damage, can sue you. If successful, he or she would be entitled to receive money from you, which you would obtain from your liability coverage. This coverage may be referred to on your policy or insurance statements as "third party coverage." You and the insurance company are the first and second parties; those who may sometime sue you are often referred to as "third parties."

Your liability coverage probably includes a promise from the insurance company to pay for the services of a lawyer of the company's choice to defend you if you are sued. It also includes a specific limit on the amount of money the insurance company must pay if such a lawsuit is decided against you or settled by the insurance company. Once the insurance company has paid up to its liability limit, you are on your own to pay the balance, if any, owed to the person who sued you. You should know the liability limits of your policy and be sure that the coverage you have purchased is appropriate.

Your policy also provides you with certain coverage for your own injuries. Your "first party medical benefits," sometimes called "personal injury protection" or "PIP" coverage, pay your medical bills, wage losses, or death benefits if you are injured in an automobile accident. You collect these benefits no matter who was at fault in the accident. Your first party or PIP coverage may be fairly minimal, consisting of only $5,000 in medical coverage. It may be substantial, including combined coverage for medical expenses, wage losses, and death benefits. You should review your existing first party coverage and adjust it if necessary for your current needs.

Your "underinsured motorist" coverage is insurance you purchase from your own insurance company to pay for your losses if you are injured by someone whose liability coverage is not sufficient to pay for all the injuries you have suffered. Your "uninsured motorist" coverage is insurance you purchase to pay your own losses if you are injured by an uninsured or hit-and-run driver.

While it is mandatory that you maintain minimal liability coverage of $15,000 for each person you may injure, up to $30,000 for any one accident, your purchase of underinsured and uninsured motorist coverage is optional. You may have none at all. Since many people purchase minimal liability coverage, and an alarming number of drivers drive without any insurance at all, it is wise to purchase underinsured and uninsured motorist coverage. Review your insurance policy to make sure that you understand your coverage and that you are adequately insured.

RIGHTS TO SUE

Whether you remember or not, you have chosen a "full tort" or a "limited tort" option on your insurance policy. If you have elected the "full tort option" under your automobile insurance policy, you are entitled to file a lawsuit against a negligent driver who has caused you injuries in an automobile accident. A tort is a legal wrong--something more than ordinary rudeness but less serious than a crime. Negligent driving is a tort. If you chose the full tort option, you retain the right to sue a negligent driver. You retain the right to sue for any uncovered medical expenses or wage losses. You may also recover for your pain and suffering, for other economic losses, and for the permanent or continuing limitations on your activities and income that may result from your injuries.

If you chose the "limited tort option," you can sue only for the actual economic losses you have sustained that are not covered by your automobile insurance or other insurance. However, if you have sustained a personal injury resulting in death, serious impairment of a body function, or permanent serious disfigurement, you may sue for your pain, suffering, and other losses. Also, if you elect the limited tort option, you may still recover for pain, suffering, and other losses if the negligent driver was drunk, was driving an out-of-state vehicle, or injured you intentionally. You can also sue if you were an occupant of a vehicle not a private passenger car or if you are suing a business responsible for a motor vehicle defect that caused your injury.

If you do not have your own policy of automobile insurance, you are bound by the tort option selected by your spouse or any insured relative with whom you live. When you select a tort option for yourself, you bind your children and your spouse or relatives in your household, unless they have their own automobile insurance policies.

By choosing the limited tort option, you reduce your annual premium. Be sure you know what you are actually saving before you limit your rights to sue--compare those premium savings carefully to the rights you are relinquishing.

POINTERS ON POINTS

The Pennsylvania Motor Vehicle Code establishes a point system that it describes as related to "driver education and control." Pennsylvania drivers, no doubt, see the point system as more related to license suspension and insurance premium increases. Each conviction of a Motor Vehicle Code moving violation carries an automatic assignment of a certain number of points, as well as the possibility of the imposition of other sanctions. For example, a conviction for failure to stop for a school bus with flashing red lights carries the assignment of 5 points. Speeding carries the assignment of anywhere from 2 to 5 points, depending on how many miles per hour over the speed limit the guilty driver drove. An initial accumulation of 6 points requires a driver to attend an approved driver improvement school or to pass a special examination. The second time a driver reaches the 6-point mark, he or she may suffer license suspension for up to 15 days; the third accumulation of 6 points justifies a 30-day suspension. The Pennsylvania Department of Transportation must suspend a driver's license any time 11 points are accumulated, and the suspension can be for up to 15 days for each point.

Points accumulated by a driver are automatically removed by the Department of Transportation at the rate of 3 points for each 12 consecutive months in which the driver receives no new points. When a driver's record is cleared of all points and remains at 0 points for 12 consecutive months, any accumulation of points thereafter is regarded as an initial accumulation.

Most insurance companies charge an increased premium when an insured driver accumulates points. Often, the premium increase is directly tied to the number of points accumulated. Additionally, insurance companies can and do "remove" points from their insured's record more slowly than does the Department of Transportation.

PREMIUM INCREASES

Policyholders are often reluctant to submit claims to their own insurance companies after automobile accidents for fear that the filing of a claim will result in a higher annual premium. Pennsylvania law and the guidelines of the Insurance Department prohibit insurers from such premium increases, unless it is determined that the insured claimant was at fault in the accident. If you clearly were not at fault in causing the accident leading to your injuries, you should not hesitate to file your claims. If you are at fault in an accident, review your policy to see what notice you owe your insurance company.

AUTO ACCIDENT CHECK LIST

Get help for anyone who is injured.

Write notes about the accident.

Make sure to write down information about the other driver, car, passengers, and witnesses.

Call us to find out about your right to recover for your injuries.