Auto insurance is one of the most important types of insurance you will ever buy. According to the car insurance industry, the average person files an auto insurance claim once every 17 years. Over an average lifespan, that’s 3 or 4 accidents.
The reality is that most Pennsylvanians don’t look closely at their auto insurance policies. Most of the time, we’re buying car insurance based on the premium amounts. We trust that the insurance agent is getting the best deal for us. Then, when a car accident happens, we learn the hard way, that we just didn’t have enough insurance.
Pennsylvania auto insurance law imposes bare minimum limits on every car insurance policy issued in this state. Here’s a look at what those limits are and why they simply aren’t enough.
Minimum Pennsylvania Auto Insurance Limits
- Bodily Injury Liability: $15,000 per person, $30,000 per accident
- Property Damage: $5,000
- Uninsured Motorist Coverage: $15,000 per person, $30,000 per accident
- Underinsured Motorist Coverage: $15,000 per person, $30,000 per accident
- First Party Benefits Medical Payments: $5,000
For purposes of this article, let’s separate the types of coverage. The first type kicks in when you cause an accident. The second type kicks in when someone else causes a serious accident. The final coverage kicks in when you’re injured, regardless of who caused the accident.
You Caused a Car Accident – What Coverage Applies?
1. Bodily Injury Liability ($15,000/$30,000)
Bodily injury liability coverage kicks in when you caused an accident. Let’s say you were driving in Roosevelt Boulevard in Philadelphia, which is one of the most dangerous stretches of road in Philly. You run a red light and slam into a car. The other driver suffers serious injuries. Since you’re at fault, your bodily injury liability coverage kicks in and covers you from legal claims by the injured party. That party could get compensated by your insurance company, up to the amount purchased on your policy. The minimum amount required is $15,000 per person and $30,000 per accident.
2. Property Damage ($5,000)
Property damage coverage kicks in when you caused damage to other property. For example, you are driving during a winter storm and swerve into a guardrail or someone’s expensive mailbox. Property damage coverage would kick in to cover you against a claim by the property owner. The owner of the guardrail or mailbox could receive up to the amount purchased. The minimum amount required is $5,000.
Someone Else Caused the Car Accident – What Coverage Applies?
Uninsured/Underinsured Motorist Coverage ($15,000/$30,000)
Uninsured (UM) and underinsured (UIM) motorist coverage is one of the most important types of coverage a Pennsylvania resident can buy. It kicks in when another person caused an auto accident and they don’t have coverage at all or if they do, it’s insufficient. In other words, UM/UIM coverage protects you when another driver causes an accident and is financially irresponsible or does not have enough coverage under their policy.
Uninsured coverage applies when the other driver has no coverage at all or the insurance company of that car/driver declines coverage for whatever reason, i.e., due to a lapse in coverage. UM also applies when you’re hit by a car that flees the scene.
Underinsured coverage applies when the other driver has insurance, but in amounts that don’t compensate you. This is especially important in serious injury cases. For example, you’re driving on I-476 outside of Philadelphia and get hit by another car at a high rate of speed. You suffer major injuries. Your medical bills alone exceed $100,000, and you are disabled from working for a year. The financial losses alone exceed $150,000. How do you recover your financial damages?
The at-fault driver only has a minimum policy with $15,000 of bodily injury coverage. You get the $15,000 of coverage from the at-fault driver’s insurance company. But what about the other $135,000 in financial losses? If you had UIM coverage, you could make a claim for up to the amount purchased. While the minimum amount required is $15,000, most people purchase higher amounts of coverage. So, if you had $100,000 of UIM coverage, you could make a claim for up to $100,000.
Unfortunately, UM/UIM coverage is optional. Your auto insurance company is only required to offer it to you. In our auto injury law practice, we see good people suffer serious financial hardship because they don’t buy UM/UIM coverage and get into an accident with someone who doesn’t have insurance or doesn’t have enough insurance. Having UM/UIM helps to protect you and your family.
First Party Benefits Medical Payments – Doesn’t Matter Who Caused the Accident
Medical Payments/PIP ($5,000)
First party medical benefits are also known as PIP (personal injury protection) coverage. This is a mandatory type of coverage, unlike UM/UIM, and covers medical bills for auto injuries. PIP also covers things like lost wages and funeral expenses. PIP applies regardless of fault. It doesn’t matter who caused the accident, if you’re injured and need medical treatment, you make a claim under your own car insurance policy for PIP benefits.
The minimum coverage amount in Pennsylvania is $5,000 per person, per accident. Many insurance policies are written for higher coverage amounts. It’s not unusual to see a $50,000 PIP coverage amount.
The per person, per accident amount works like this. A dad and his son are in a car accident and both need medical treatment. They are covered under a single auto insurance policy with the minimum PIP coverage amount of $5,000. Each can each make a claim for up to$5,000. Later in the year, the dad gets into another car accident. He can, again, make a PIP claim for up to $5,000.
Every Pennsylvania resident should understand their auto insurance coverage amounts. Life circumstances change, and a coverage amount that was sufficient two years ago, may no longer provide adequate coverage.
Visit our law library for more info about Pennsylvania auto insurance coverage and accident law.
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