Auto Insurance Information
AUTO LIABILITY LIMITS – WHAT DOES ALL THAT MEAN?
So you have car insurance - take a minute to look at your policy. Do you see numbers that look like this — 100/300/100? What do those numbers mean? It is important that you understand these numbers, what they mean and if you have enough liability insurance.
Liability Limits – WHY YOU SHOULD CARE
Auto Liability Insurance pays damages if it is determined that you hurt someone or damaged his property in an car accident. Example — you ran a stop sign and hit another car. The other car is damaged. What about the people in the other car? This is why you should have ample Liability Insurance.
Understanding The Numbers
Bodily Injury Limits: These are the first numbers you usually see. Example 100/300. This means the most the policy will pay is $100,000 per person up to $300,000 per accident. If an injured person has injuries up to $100,000 — your insurance will pay that amount. However, if you have lower liability limits like 25/50 and the person has $100,000 in injuries. The company will pay $25,000 and you are responsible for the remaining $75,000. In this example only one person is hurt. What if two or three people were hurt? The limits are the same. 25K max per person. 50K max per accident. Your policy will not pay more than $50,000. You will be responsible for any remaining costs.
Property Damage Limits: If your policy shows 100/300/100 or 100PD on a separate line – you have $100,000 coverage property damage caused when you ran that stop sign. Some people have state minimum insurance — in many states the property damage limit is $25,000 (or less). That seems like a lot of money. Until you look around at the cars in any parking lot. You will see lots of cars that cost more than $25K. What if you hit two cars? $25,000 does not seem like such a big number. Some accidents do not involve other cars — but buildings.
So why are we sharing this information?
Answer: So you will review your Auto Insurance Policy. Are you properly insured? If you have any questions or concerns — please contact us. We want informed customers and will be happy to review your liability limits with you.
When a client comes into my office with a potential personal injury claim involving an auto accident, many times one of the first questions I'll ask is whether that person had full tort or limited tort insurance coverage at the time of the accident. And in many of those situations, the response I get to that question is "I don't know" or "what's the difference." The difference can be significant.
In Pennsylvania, insurance providers are required to provide consumers with a choice between full tort coverage and limited tort coverage. Limited tort coverage is almost always cheaper and, because of that cost savings, can affect the choice an individual makes. This choice has the potential to cost them significantly should they ever be involved in an automobile accident.
The difference between limited tort coverage and full tort coverage is that, limited tort coverage permits a person injured in an automobile accident to only recover for his or her out of pocket medical bills, wage loss, automobile repair costs, and other actual monetary loss. When an individual elects to have limited tort coverage, he or she is foregoing the right to pursue damages in a personal injury claim for pain and suffering and other similar damages, even where you are not at fault. There is a limited exception to this general rule that permits a person with limited tort coverage to pursue a claim for pain and suffering where the injuries they sustained in the accident were "serious." Serious injuries however, are not always clearly defined or proven. Certainly, where an individual requires life saving treatment following an accident, those injuries would be serious and allow full recovery for pain and suffering. The problem is that in the majority of cases, the line that differentiates a serious injury from that of a non-serious injury is less clear.
An individual with full tort coverage, on the other hand, regardless of the extent of the injury, is able to assert a claim for pain and suffering, so long as the accident was not his or her fault. The individual with full tort coverage not forced to first demonstrate that they received a serious injury from the accident before they can recover for pain and suffering. Because there is no threshold which must first be met, an individual with full tort coverage can automatically assert a claim for all of their losses, not just the "out of pocket" costs.
So, when the time comes to purchase a new insurance policy, or when you have an opportunity to review the terms of your existing policy with your insurance agent, it’s a good idea to discuss with your agent the election you currently have on your policy. Even though with limited tort coverage you are able to recover costs like medical bills related to the injury at the time of the accident, it's hard to anticipate the long term affects an accident can have on your health. For example, what may initially present as a non-serious back injury, may over time continue to cause inconvenience, annoyance, and pain which may have a significant impact on your daily life. These ongoing problems may effect your ability to maintain a home, fully perform your job functions, and other similar issues for which you would not be able to recover if you had limited tort coverage.
The bottom line is, if you want to be sure that you have preserved your right to pursue the full extent of your damages in a personal injury claim you must make an election for full tort coverage. If the added cost is a concern, discuss with your agent ways to save on your policy in other areas, like increasing your deductible.
Injured in an Accident – Who Pays My Medical Bills?
If you are injured in an accident, one of the first questions you will likely have is “Who will pay my medical bills?” The answer depends on whether the accident happened at or outside of work and whether a vehicle was involved in the accident.
If you are injured in an accident at work, your employer’s Worker’s Compensation insurance will pay your medical bills. This obligation applies regardless of whether or not you caused the accident through your own negligence. The obligation to pay for medical expenses is for the rest of your life. There are no deductibles or co-pays. For the first six months after your injury, you can be required to treat with only employer-approved medical providers. After that, you have free choice of doctors.
Vehicle Related Accidents
If you are injured in an accident involving a vehicle, car insurance will pay your initial medical bills. The following rules define what car insurance policies cover medical bills, and they apply regardless of who caused the accident:
▪ For someone who owns car insurance, their own car insurance pays the medical bills;
▪ For someone who does not own car insurance, but resides with a relative that does, the relative’s car insurance pays;
▪ For someone who is uninsured and does not reside with an insured relative and was involved in an accident while a driver or passenger in a car, that car’s insurance pays; and
▪ For an uninsured, non-occupant of a vehicle, like a bicyclist or pedestrian, the insurance of any vehicle involved in the accident pays.
Car insurance policies must pay medical bills up to the limits of coverage. The Pennsylvania State Minimum Medical Coverage is $5,000. There are no deductibles, co-pays or limits on what providers can provide treatment.
When car insurance medical payment limits are reached, public or private health insurance must begin to pay medical bills. If a lawsuit arises out of the accident, some private health insurance companies and all public companies are entitled to be reimbursed for their payments out of any recovery. Claims for payment of future medical expenses can be asserted in the lawsuit.
If you are involved in a non-work related and non-vehicle related accident, like a slip and fall or other accident causing injuries, medical bills will be paid by your public or private health insurance. If you do not have health insurance, you will need to pay out of pocket.
If the accident was not your fault, you can bring a lawsuit against the responsible party to recover past and future medical expenses (as well as compensation for lost wages and pain and suffering). Usually, if you do recover compensation in the lawsuit, your contract with the health insurance company will require you to reimburse public or private health insurance for the accident related medical bills paid on your behalf.