Automobile Insurance
| Underwriting Factors | Property Damage | Liability Damage | Optional Coverage | Tort Options |
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For most Americans auto insurance is a very expensive purchase. To make an informed decision you should learn as much as you can about the underwriting factors that affect the cost, the different amounts of coverage available, the requirements in your state.
Pennsylvania is a “No Fault” state. That means that every driver is required to purchase Personal
Injury Protection, PIP, in which the driver’s insurance company covers injury-related expenses and associated costs as a result of an accident regardless who is at fault. This insures that every motorist
will receive immediate medical attention. Also, this limits a driver from suing or being sued for damages as a result of an accident in most cases. However, based on the severity of the accident/injury or monetary amount, if you are at fault you may be subject to a lawsuit for damages.
Pennsylvania Auto Insurance Minimum Coverage – Minimum auto insurance coverage required in Pennsylvania must provide at least $15,000 for injury liability per person in an accident, $30,000 for all injuries in a single accident, and $5,000 for property damage in that accident.
No-Fault
Each state must implement either a Tort System or a No-Fault System. Liability insurance above applies to the Tort system. In a no-fault state your insurance company pays you directly for your losses as a result of injury sustained in an accident, regardless of who is at fault. If the other driver was injured in the same accident, the other driver collects losses from his or her own insurance company. You could be sued only under specific conditions. You could be sued if you are the driver at fault in an accident that causes very serious injuries to others.
Personal Injury Protection (PIP) is the most basic no-fault coverage. This coverage pays for the losses incurred due to injuries to anyone riding in your car a minimum benefit amount per person for injury regardless of fault. The level of benefits varies widely among states. See "Minimum State Insurance Requirements".
The following coverages are normally included under PIP:
Medical Expense Benefits include all reasonable charges for medical, hospital, surgical, professional nursing, dental, optometric, ambulance, prosthetic services and X-rays.
Rehabilitation Expenses Benefit includes charges for psychiatric, physical and occupational therapy and rehabilitation.
Work Loss Benefit includes coverage for loss of wages up to a specific limit for a specific time period following injury.
Funeral Expense Benefit covers all reasonable charges up to a specific amount for funeral services including burial and cremation expenses.
Survivors Loss Benefit provides a payment to your surviving spouse or dependents up to a specific amount for a specific time period.
Residual Bodily Injury Liability Coverage protects your family and anyone else while in your car with your permission in the event you are sued because of injuries caused to others. Each no-fault state has defined certain thresholds that, if exceeded, open the possibility of a suit. These thresholds can be based on specific dollar amounts, clearly defined injuries and/or death resulting from an accident. No-Fault specifically excludes property damage liability for damage that you cause to the property of others. If you are at fault in such an accident, you will be held liable and can be sued for these losses. You must buy separate collision coverage to satisfy this risk.
This website may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting or tax advise. You may wish to consult a competent attorney, tax advisor or accountant. It is intended for informational purposes only.