The Pennsylvania Motor Vehicle Financial Responsibility Law (PMVFRL) – An amendment was made to the PMVFRL on July 1, 1990 by Act 6 to attempt to reduce the high rates for car insurance and lower those driving with no auto insurance coverage. The act states that an owner of a vehicle is required to show “financial responsibility” at the time of registration”.
Financial Responsibility – the ability to respond to liability on account of accidents arising out of the maintenance or use of a motor vehicle. This basically means that you are liable, or responsible, for damage or injury to another person or their property in the event of an accident.
Pennsylvania Minimum Limits of Liability – the minimum limits of liability in Pennsylvania are: $15,000 for bodily injury to an individual in any one accident; $30,000 for bodily injury to two or more people in an accident; and $5,000 damage to property owned by another individual in an accident.
Bodily Injury Liability – pays others when you are responsible for causing injuries and includes medical and rehabilitation expenses, and noneconomic damages such as pain and suffering.
Property Damage Liability – pays others when you are responsible for damage to their property.
Limited Tort – limits your right to sue to “specific out-of-pocket” expenses. The exception is cases involving serious injury or death, in which you can sue for pain and suffering.
Full Tort – DOES NOT limit your right to sue. This means that you could potentially collect both specific damages and also noneconomic damages. “Specific damages” are damages such as medical expenses and loss of income, while “noneconomic damages” are ones such as pain and suffering.
First Party Benefits – are benefits that are payable to you. The following is a list of First Party Benefits:
- Medical Benefits: reasonable and necessary medical and rehabilitative services and are paid regardless of fault.
- Extraordinary Medical Benefits: medical and rehabilitation expenses in excess of $100,000; and is an optional coverage that can be purchased in $100,000 increments up to $1,100,000. Payments are limited to $50,000 per year during the first 18 months following an accident.
- Income Loss Benefits – pays loss of income to you if you are injured in an auto accident. This is an optional coverage and is limited to 80% of loss of gross income up to $2,500 per month and up to a maximum of $50,000. A 5 day waiting period applies to this benefit.
- Funeral Benefit: pays the funeral, burial, or cremation expenses if you die in a car crash within 24 months from the date of the accident (an example would be if you are hospitalized as a result of the crash and you die while hospitalized less than 24 months after the date of the crash).
- Accidental Death Benefit: basically the same as funeral benefit, except that if accidental death were to pay, the highest amount possible is $25,000 instead of $2,500 with the funeral benefit.
Uninsured Motorist (UM) insurance – this pays for bodily injuries caused by an uninsured motorist, or someone who does not have auto insurance. It is optional coverage that is required by law to be signed as either accepted or rejected coverage.
Underinsured Motorist (UIM) insurance – this pays for bodily injuries caused by a motorist whose insurance policy carries bodily injury limits that are too low. This, like UM, is an optional coverage and must be rejected if not desired.
Stacking – means that in the same type of accident, coverage limits would be the sum of the uninsured or underinsured motorist coverage limits for all of the autos insured under the policy. An example would be someone who insures two vehicles on a policy with UM and UIM of $100,000 for each car, then each auto would be insured to up to $200,000 in the event that UM or UIM must be used.
Comprehensive coverage – comprehensive, also known as “comp” or “other-than-collision”, means any type of loss that is not collision. Some examples include falling objects, fire, theft, and hail.
Collision Coverage – collision can basically be defined as colliding into another object with your car such as a structure, another automobile, etc.
Transportation Expense – this provides temporary transportation expense of up to $50 per day up to a maximum of $1,500 total in the event your car gets stolen or it is damaged and it is insured for collision and/or other than collision.
Loan/Lease Payoff Coverage – this pays the difference between what you owe on the vehicle and what the insurance pays if your car is determined to be a total loss (or commonly considered “totaled”) or is stolen and not recovered, after the comprehensive or collision deductible is applied. You need both comp and collision on your policy before Loan/Lease Payoff Coverage can be added.
Repair Replacement Collision Coverage – applies to vehicles under a certain number of years old, usually 5, from the year of the current policy. In the event of a collision of an auto carrying this coverage, the company will pay for either reasonable repair costs with part that are of like kind and quality, or the cost of a new car; whichever one is less expensive. Like most other coverage options, there is a deductible for this coverage (usually $500).