(In addition to representing the victims of medical malpractice, this office represents injured parties in a number of other contexts. As a result, this blog will at times contain entries that are not directly related to medical malpractice, and this is one of those entries. Almost all of us have been involved in automobile accidents. All to often, people injured in an auto accident are severely prejudiced and not allowed to make a full recovery because of decisions made when purchasing automobile insurance. The information contained here should allow you to make reasoned decisions about your auto insurance.)
In this age of mandatory automobile insurance in Pennsylvania (and most if not all other states), vehicle owners must purchase such insurance. Insurance companies and their agents often inform us that by waiving or limiting certain types of coverage, we can save money. Unfortunately, too many of us fail to understand what we are giving up to obtain lower premiums. All too often, we make decisions that are “penny wise but pound foolish.”
All policies issued in Pennsylvania must provide “liability” coverage of at least of $15,000 for one person injured in an accident, at least $30,000 for two or more persons injured in an accident and at least $5,000 for property damage in an accident. “Liability” coverage is the insurance that pays damages to persons injured in an accident that is caused by anyone driving the insured car with the owner’s permission. Of course, additional liability coverage is available, and the cost of coverage in excess of the required minimum is relatively inexpensive when compared to the price of minimum coverage.
Pennsylvania law gives everyone purchasing automobile insurance the right to choose the “limited-tort” option, a seemingly innocuous choice that permits one to obtain reduced premiums. In return for the reduced premiums, a person injured in an accident caused by another foregoes the right to sue for pain and suffering unless the injuries are deemed “serious” under the law, a standard that most times cannot be met. Let’s be perfectly clear-the “limited-tort” option is a good choice under only one scenario, i.e., where the people making the choice and their families are never involved in an automobile accident. In today’s anti-personal-injury-litigation climate, we are led to believe that pain and suffering somehow is not worthy of compensation. Just ask someone who has been injured in an auto accident. Further, this office has represented a number of individuals who could not recover pain and suffering damages because of choosing the “limited-tort” option and each and every one of those individuals elected to pay higher premiums to allow a complete recovery in the event of any future accidents.
All insurance policies must also offer uninsured motorist benefits and underinsured motorist benefits. Perhaps the most misunderstood of all insurance benefits, these are benefits that pay the damages resulting from personal injuries that you suffer in an accident that is caused by another driver who either has no insurance or insufficient liability coverage to pay all of your damages. Uninsured and underinsured coverages cannot exceed the liability coverage of a policy. However, under Pennsylvania law, one may waive these benefits entirely or purchase benefits in amounts less that the limits of liability insurance. Again, either waiving these benefits or selecting limits less than the limits of liability coverage is never a wise choice, particularly when you consider the cost of uninsured and underinsured benefits are only a fraction of the cost of liability coverage. In fact, when the Pennsylvania legislature first mandated that all policies offer these benefits, many insurance companies tried to talk consumers out of purchasing these benefits, telling the consumers that uninsured and underinsured benefits are necessary only “if you want to sue yourself.” Because of such tactics, the legislature has required that any waiver or selection of lower limits be done with a mandatory form in a specific manner. Remember, these inexpensive benefits protect you and your family and the cost of this insurance cannot increase because you make a valid claim.
Finally, with regard to uninsured and underinsured benefits, there is the concept of “stacking” these coverages. When you stack such benefits, you are able to increase the limits of coverage by the number automobiles insured on the policy. The most common example is where more that one vehicle is insured on the same policy. Assuming that the limits for each vehicle are $100,000/person, those limits increase to $200,000 with two vehicles, to $300,000 with three, etc. You are permitted to waive stacking, another foolish choice because the cost of choosing stacking is so minimal as to almost cost nothing. Moreover, even if you only have one car, you should not waive stacking because you often will be eligible for benefits from a car in which you are a passenger; by waiving stacking, you forego the benefits that you have paid for on you own policy. In short, purchase as much uninsurance and underinsurance coverage as you can afford and stack it!
Of course, exceptions to all of these rules are often found in the language of your insurance policy, language that is often deliberately made difficult to understand. You have to be particularly careful if you have relatives who live with you if their cars are insured on policies that are separate from yours. If you have any questions concerning your automobile insurance, please feel free to call our office to discuss any questions that you might have.