Auto insurance is probably one of the most commonly misunderstood types of insurance. There are literally dozens of terms, conditions and procedures you’re probably not aware of. This is true whether you’ve had the same insurance policy for years or you’re buying auto insurance for a new car. Below is a discussion of some of the most commonly misunderstood auto insurance terms.

Bodily Injury | Tort Election | PIP | UIM/UM

Bodily Injury (AKA Liability Coverage)

Bodily injury coverage protects you in the event you are negligent and cause an accident. That’s why it’s also referred to as liability coverage. It applies to all types of auto accidents, like car accidents, pedestrian accidents, etc. If you cause an auto accident that results in physical injuries to another individual, this coverage kicks in. Basically, an injured individual (driver, passenger or pedestrian) can make a claim against you for personal injuries and in 99% of all cases, their financial recovery will be limited to or capped by the amount of bodily injury coverage you purchased. Pennsylvania law imposes a minimum amount you must purchase: $15,000. Many people purchase higher limits. If you live or work in Philadelphia, you should seriously consider purchasing higher limits.

Example: You are driving on Kelly Drive in Philadelphia and misjudge one of the notorious curves of Kelly Drive. You veer into oncoming traffic and cause a head-on collision. The other driver is seriously injured. On your car insurance policy, you purchased $100,000 of bodily injury coverage. The other driver makes a claim against you, since you caused the accident. The odds are that the injured driver will be capped at the $100,000 on your policy, which ultimately gets paid by your auto insurance company. That’s the contractual agreement you have with your auto insurance company. You pay a premium so that when and if you cause a car accident, your insurance company agrees to pay up to the amount you elected. In limited cases, if you caused damages that amount to over the bodily injury limit (i.e., $100,000), you may be personally liable. However, this rarely occurs, unless you have access to liquid assets that are only in your name.

More: What to do After a Car Accident in Philadelphia – By a Philly Car Accident Lawyer

Full Tort/Limited Tort (AKA Tort Election)

The tort election is required on all auto insurance policies issued in Pennsylvania and is probably one of the most important elections you will make. What you choose will affect what you can claim in the event you have to bring a lawsuit or claim after you’ve been injured in an auto accident due to someone else’s negligence. The limited tort election acts like a filter; the full tort election basically means there is no filter. If you have full tort, there’s no filter or limitation on your legal right to sue a negligent driver for causing an auto accident; you can make a claim for pain and suffering damages.

On the other hand, under PA auto insurance law, the limited tort election filters or limits your ability to sue for pain and suffering unless your injury falls within specific categories. The most commonly litigated limited tort category is the serious and permanent injury category. Per this legal category, if you have limited tort, you cannot sue the at-fault driver for pain and suffering unless you suffered a serious and permanent injury. What constitutes a serious and permanent injury is the subject of practically every limited tort auto accident lawsuit in Philadelphia.

Many people make the mistake of choosing limited tort when they should choose full tort. That’s because the limited tort election results in lower insurance premiums. Naturally, people want low auto insurance premiums.

Whether you should choose full tort or limited tort depends on your individual circumstances. Where do you live? Where do you work? How many miles do you drive for work? The answers to these questions can help you figure out if you should elect full tort. If you live or work near an accident prone area, you may want full tort.

Example: You live in the Northeast section of Philadelphia and drive on Roosevelt Boulevard every day to get to and from work. You should have full tort because Roosevelt Boulevard is a hot spot for auto accidents and the odds are good that you may be seriously injured in an auto accident. If you are injured in an auto accident on Roosevelt Boulevard in Philadelphia and have full tort, you get to make a claim for pain and suffering against the at-fault driver.

PIP (Personal Injury Protection)

PIP coverage is a relatively minor type of auto insurance in Pennsylvania, but one most people don’t know anything about. PIP covers different things, but most importantly, it covers medical bills and if you elected it, lost wages. Under PA law, auto insurance policies must contain a minimum of $5,000 of PIP (medical) coverage. Pennsylvania is a no-fault state, like New Jersey. This means that it makes no difference who caused the accident. If you’re injured and need medical treatment, your medical bills get paid by PIP, up to the amount purchased. While most people choose the minimum coverage amount, many people purchase higher coverage amounts. Some people purchase $10,000 or $50,000 coverage amounts.

Example: You are injured in a car accident in downtown Philadelphia. The accident was equally your fault and the other driver’s fault. You need emergency room care including an MRI and x-rays. You have $5,000 of medical bills between the ambulance and the ER bills. Here, bills would get paid by your auto insurance company through a PIP claim.

It is important to note that many people make the mistake of giving the wrong insurance information to medical providers after auto accidents in Philadelphia. Many people will give their private health insurance info or the info of the at-fault driver. This only creates confusion, which adds to your stress after an auto accident. Therefore, you should provide your auto insurance info.

UIM (Underinsured Motorist) & UM (Uninsured Motorist)

UIM and UM coverage go hand in hand and is another very important type of coverage that many Philadelphia residents decline. UIM and UM coverage protects you against other drivers who are financially irresponsible. Underinsured coverage kicks in when you are injured in a car accident caused by someone who didn’t carry enough bodily injury/liability coverage to compensate you for the injuries and damages they caused. Basically, the at-fault driver is underinsured. If you have UIM coverage, you can make a claim with your own car insurance company which would then pay you up to the amount purchased.

UM coverage is slightly different than UIM coverage. UM kicks in when you’re injured in a car accident caused by someone who had no insurance coverage whatsoever. UM tends to apply in hit and run situations or joy ride accident cases (i.e., the driver did not have the car owner’s permission).

For more information about Philadelphia auto accident laws, visit our law library. Our law library is brought to you free of charge by our car accident injury lawyers.

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