Reviewed and updated: October 29, 2020
1. Personal Insurance Injury Protection (PIP)
Recovering Medical Expenses
In Pennsylvania, drivers are required by law to have personal insurance injury protection (PIP) on their auto insurance policies. PIP covers medical expenses and lost wages. PA auto insurance laws mandate that drivers must carry the minimum amount of PIP medical coverage of $5,000. Drivers can opt to buy a higher coverage amount in exchange for a higher premium.
What most drivers don’t know is that PIP coverage is for their own protection. Many drivers in Pennsylvania who’re injured in car accidents think that the other, at-fault driver’s insurance company pays for medical expenses related to the injuries. This is not true.
Rather, the injured driver’s own insurance company pays for the medical expenses via PIP coverage. This is how PA’s no-fault law works — regardless of who caused the accident, an injured driver’s own insurance company pays for their own medical expenses up to the limit purchased.
Recovering Lost Wages
Other than medical expenses, PIP also covers lost wages. However, unlike medical PIP benefits, income loss benefits are not mandatory pursuant to PA law. Therefore, the insured must purchase income loss benefits as an optional benefit. In addition, drivers won’t recover 100% of lost income; they recover a percentage of their lost wages.
In addition to medical bills and lost wages, PIP may cover funeral expenses, extraordinary medical expenses, and death benefits, all of which are optional.
2. Full Tort Coverage
There are two types of Pennsylvania auto insurance policies: full tort and limited tort. A full tort insurance policy allows an injured driver to retain all legal rights against an at-fault driver. The insured driver would be able to sue an at-fault driver for both economic and non-economic damages.
Economic damages are tangible losses, such as medical expenses and lost wages not covered by PIP and any other out of pocket expenses.
Non-economic damages are not as straight forward as economic damages. Non-economic damages encompass an injured individual’s pain and suffering. Therefore, pain and suffering damages are different for everyone. Full tort allows drivers to sue for non-economic damages regardless of how serious their injuries may be.
3. Limited Tort Coverage
Unlike a full tort auto policy, limited tort limits a driver’s legal rights against the at-fault driver. Limited tort prevents injured insured drivers from suing at-fault drivers for non-economic damages, i.e., pain and suffering.
It is important to note that even though limited tort drivers may not sue for pain and suffering damages, they are still able to sue for non-economic damages not covered by PIP.
However, there are exceptions to limited tort per Pennsylvania car accident law. Limited tort drivers may be deemed to have full tort under very limited circumstances. One of the exceptions is if the at-fault driver is operating a vehicle from another state. Another exception is if the at-fault driver is convicted of drunk driving.
Probably one of the most litigated exceptions in Pennsylvania car accident cases involves situations where the injured limited tort driver’s injuries resulted in a serious impairment of a bodily function, which is defined by Pennsylvania case law. If the injuries are “serious,” then the limited tort driver is deemed to have full tort and allowed to sue for pain and suffering damages.
4. Underinsured Motorist (UIM) Coverage
One of the most important insurance coverage drivers should have on their auto policies is underinsured motorist coverage. Many drivers in Pennsylvania do not know about UIM coverage and do not realize its importance.
UIM comes into play when the other driver’s insurance policy does not provide enough to compensate for the injured driver’s injuries and damage. In most cases, UIM applies when the other, at-fault driver purchased a minimum liability policy (i.e., $15,000 in PA). After receiving the max compensation via the at-fault driver’s policy, the injured driver would file a UIM claim to recover the remaining damages up to the limit of UIM coverage purchased.
For example, a Philadelphia resident is injured in a car accident caused by another driver. The resident suffers $50,000 worth of financial losses after PIP as well as pain and suffering. The at-fault driver has a minimum limits auto insurance policy of $15,000, which the resident obtains. Because the resident purchased a car insurance policy with $100,000 of UIM benefits, they would file a UIM claim for all damages exceeding the $15,000 from the at-fault driver. This UIM claim would include at least $35,000 of financial losses ($50,000-$15,000), plus their pain and suffering damages (assuming they have full tort or one of the limited tort exceptions applies).
5. Uninsured Motorist (UM) Coverage
Uninsured motorist coverage applies when the injured driver is injured in a car accident where either 1. the at-fault driver does not have auto insurance (i.e., policy lapsed), or 2. the at-fault driver fled the scene and cannot be found (i.e., a hit and run).
Here, the insured injured driver would file a UM claim with his own insurance company. Like UIM, the driver may be compensated for his injuries up to the limit of purchased coverage.
Unlike PIP coverage, UIM/UM coverage is not mandatory or required by law. Many drivers choose not to purchase this option in exchange for a lower annual premium.