In Pennsylvania, all drivers are required by law to hold basic levels of insurance.
What happens when a driver causes an accident and doesn’t have insurance? What about a hit-and-run accident where the at-fault driver can’t be identified? How does insurance coverage work to protect those who are injured?
Car accidents happen. No one sets out to be involved in an accident, but common sense and state law require drivers to hold basic levels of insurance to protect drivers, passengers and the vehicles they operate in the event of a collision.
Pennsylvania operates what is generally referred to as no-fault insurance, which simply means that in the event of an accident, drivers work with their own insurance company to recover losses rather than going after the at-fault driver.
This plan is intended to speed the process along and prevent excessive litigation. The policy is voluntary, but financial incentives have led to no-fault plans being the most commonly purchased. No-fault plans are generally cheaper than other forms of insurance coverage in Pennsylvania.
Under state law, drivers are required to hold the following levels of financial responsibility at a minimum:
- Medical Coverage: This ensures that you, passengers in your car, and anyone else covered by your policy that is injured is covered. This is often referred to as First Party Benefits by insurance companies. State minimum is $5,000. Higher values are recommended and optionally available, at additional expense.
- Bodily Injury Liability: This coverage pays the medical and rehabilitation bills of people you injure in an automobile accident, and covers other damages you are responsible for causing. State minimum is $15,000 for one person/ $30,000 for the entire accident. Higher limits are available at additional cost.
- Property Damage Liability: This covers damage to vehicles and other property you damage when at fault for an accident. State minimum is $5,000. Higher amounts are available for additional cost.
In Pennsylvania, some companies offer a plan that meets the bodily injury and property damage requirements with a single, $35,000 limit.
Insurance companies will typically advertise the state minimum coverage as 15/30/5. This refers to the bodily injury liability coverage limits and property damage liability. A full coverage, comprehensive policy is identified by higher values, like 100/300/100.
Drivers have the option of selecting one of two types of plans, called Full-Tort and Limited-Tort coverage. Limited-Tort is commonly referred to as no-fault coverage. Under full-tort coverage, insured motorists are able to seek financial recovery from the at-fault individual, including pain and suffering.
Limited tort coverage is cheaper for the consumer, but limits what can be covered and how much money can be paid out, often leaving an injured person to lean on other forms of insurance, like medical coverage, to cover expenses. Limited tort coverage does not allow recovery of pain and suffering.
A wide variety of optional coverages are available. Among the most prominent, comprehensive and collision coverage pay for damage to your vehicle from theft, fire and flooding among other disasters and cover damage to your vehicle. These coverages are available in various amounts and are typically required when financing or leasing a car.
Coverage is available to cover funeral expenses, extraordinary medical coverage and lost wages.
Pennsylvania does not require drivers to carry uninsured or underinsured coverage that protects drivers in the case where an at-fault driver does not have insurance. While similar in many ways, the two coverages work differently and are typically purchased separately. Some insurance companies offer a bundled package that covers both uninsured and underinsured damages.
Uninsured Coverage
Policies that include uninsured motorist coverage are intended to provide compensation for you and your passengers in the event a driver causes an accident and does not have automobile insurance. According to the Insurance Research Council, an estimated 13 percent of drivers have no insurance coverage at all nation wide. Pennsylvania ranks in the top ten for lowest average number of drivers without coverage, at 7.6 percent. Pennsylvania has the 7th lowest number of uninsured motorist claims in the nation.
The National Automobile Insurance Commission found that a strong link between employment and insurance coverage exists, with unemployed individuals more likely to have low amounts or no coverage. Additionally, the NAIC found no link between compulsory uninsured coverage and the rate of uninsured motorist claims. The belief is that because uninsured motorist coverage essentially puts the cost of covering drivers who don’t pay for insurance under the responsibility of those who do, there is little in the way of discouragement for those who are uninsured to get right with the law.
Some states have begun using software to identify drivers who fail to maintain coverage, automatically reporting them to the appropriate Department of Motor Vehicles. Often in these states, drivers who fail to maintain insurance coverage also forfeit their vehicle registration and in some states, their drivers license as well.
The financial guidance website, NerdWallet.com recently looked at average annual cost of auto insurance with and without uninsured coverage. Pennsylvania drivers who choose to add uninsured motorist coverage pay an average of $66 yearly to add the coverage, according to the site.
Insurance rates vary by risk factor and zip code, in addition to other factors like the size of the insurance company covering a driver. An interactive MAP produced by insurance.com can be a useful tool to analyze costs of different companies in Pennsylvania.
So, how does Uninsured Motorist Coverage work and what are the limitations?
Our example driver, a male over 30 years old driving a car valued at $10,000 is rear ended by an uninsured motorist, causing $6,000 in damage to the vehicle. Our driver suffers minor neck and back injuries that require a doctor’s evaluation, x-rays and physical therapy. Our driver has a no-fault policy set at the state minimums, without additional coverage for uninsured motorists.
Since our driver has a no-fault policy, and his injuries are not considered severe, permanently disfiguring or prevent him from ever working again, he does not have the ability to sue the other driver, and his policy will be used to cover personal injury expenses.
Many cases involving neck and back injuries requiring physical therapy, the medical cost can exceed $30,000. For our driver, this would mean he exhausted his auto insurance policy and would need to rely on a private health insurance plan to cover the additional cost or pay out of pocket. Our driver would have no right to compensation for long term suffering or loss of enjoyment of life.
Our poor driver, now saddled with $15,000 in medical bills, is faced with another problem. The damage done to his vehicle is not covered by a no-fault policy. Had the offending driver maintained insurance in accordance with the law, that persons insurance would be required to compensate our driver up to the limits of the policy. Drivers that do not add additional coverage to a no-fault policy assume all responsibility for repairing their car in the event an uninsured motorist is at fault in an accident.
Most people who choose a no-fault policy do so for one of two reasons: They are trying to save money or they do not believe they would ever sue someone if they were in an accident.
No-fault policy premiums can be as much as 40 percent cheaper to the insured driver, saving several hundreds of dollars year. For many drivers who believe they will never be in an accident, this is a reasonable risk. Drivers who hold a no-fault policy and are involved in an accident in which the cause is deemed to be not their fault might still see insurance premiums increase.
According to Insurance.com, an at-fault accident in Pennsylvania will increase premiums an average of 27 percent, and typically equal about $450 annually. Purchasing a comprehensive, full-tort policy can be more expensive, but offers better protections in the case of an accident. Rates vary by insurance companies and zip code, along with risk factors each individual company uses to determine the cost to insure a driver.
Younger, less experienced drivers and drivers who have experienced accidents, DUIs, license suspensions and owners of newer, more expensive vehicles will see higher premiums. Among the notable risk factors, young male drivers will have higher rates until at least age 25, when some of the behaviors insurance companies associate with young men statistically decline. This includes poor decision making, reckless driving, speeding and a tendency to be distracted while driving.
Underinsured Coverage
Underinsured coverage works similar to uninsured motorist coverage, except that this type of coverage is intended to supplement an at-fault drivers policy that has limits which do not cover the cost of medical treatments.
Pennsylvania ranks among the bottom of states in terms of the amount of coverage required for a driver to carry, and at state minimum levels, it is highly likely that an accident that causes injury will exhaust the minimums of coverage quickly. Drivers that are concerned about the possibility of being involved in an accident with a driver carrying the state minimum of coverage can optionally purchase underinsured motorist coverage that will pay for bodily injury, lost wages and medical bills in excess of the at-fault drivers policy or limits set by a limited tort policy.
In the example given above, if our driver purchased additional uninsured/ underinsured motorist coverage, his policy would cover the additional cost of medical treatment not covered under the basic policy.
Cost of Coverage
Car insurance can be very expensive, but there are ways to reduce the cost without sacrificing coverage.
On average, Pennsylvania is among the cheaper states to purchase car insurance, despite the state average being nearly the same as the national average. Drivers who live in Philadelphia pay substantially higher rates for car insurance than drivers in most other parts of the state. In part, the higher rates are a reflection of the increased risk of accidents due to the higher number of cars on the road and the differences in risk of driving in an urban environment versus a rural commute.
Our driver in the example above who purchased the cheapest car insurance he could find pays an average of $1003 per year in insurance premiums living in North Philadelphia. Simply moving to East Falls would drop our drivers insurance premium to an average of $778 annually, with a low cost option available at $392 per year.
If our driver were to purchase more comprehensive coverage while still living in North Philadelphia, he would be looking at an average cost of $3168, but would be covered for $100,000 in bodily injury liability, with a $300,000 per accident maximum and $100,000 in property damage liability coverage. Uninsured and underinsured motorist coverage would be an additional charge.
If our driver were to move to East Falls, and keep his full coverage policy, his rate could be as low as $931 per year for the same coverage.
For younger, less experienced drivers who will see higher rates automatically, the desire to choose a low cost policy is tempting. Younger people tend to have less income, less disposable income, and less flexibility in financing than older Pennsylvanians, making the low cost options particularly enticing.
Unfortunately, younger drivers with less experience are among the most likely to be involved in an accident, and chances are good that the accident will be their fault. According to data from PennDOT, in 2013, drivers between the age of 16 and 25 were involved in 53,797 car crashes, which is around 30 percent of all reported crashes in the state.
Younger drivers who purchase cheap insurance policies, then are involved in an accident create a serious issue for other drivers in Pennsylvania, as these drivers are not going to carry insurance policies that pay out enough to cover the average cost of an accident, particularly one in which a driver or passenger was injured.
Hit and Run Coverage
Our driver went shopping at the mall, and with purchases in tow, finds his car smashed in the parking lot. No note on the windshield, no evidence of who hit his car, how or why. Just busted taillights, buckled fender and a bent trunk lid.
In most cases in Pennsylvania, uninsured motorist coverage can be used to cover damage done to a vehicle by a hit and run driver when the offending driver is not apprehended or identified.
How Much Coverage Do I Need?
Uninsured coverage, when added to a comprehensive insurance policy, can provide additional insurance for some of the less common but more costly situations drivers may find themselves involved in. The typical car crash that does not seriously injure anyone costs an average of $7,500 to repair damage. This type of crash would be a minor collision, such as would happen in traffic. An accident with serious bodily injury will cost around $65,000. If a driver or passenger is killed, the cost of the crash almost certainly will exceed $1 million.
Drivers will need to weigh the benefits and costs of superior insurance coverage before making decisions. Often, shopping around can lead to better rates without degrading limits of coverage. Other factors, such as age of vehicle and whether the vehicle is leased, financed or owned outright can have a significant impact on the cost of insurance coverage. Many drivers may find they qualify for lower cost options by participating in driver safety classes.
What to Do if You Have Been in an Accident with an Uninsured Driver
The first thing to do when in any accident is to ensure everyone involved is safe. Should anyone require medical assistance, that is the first priority. Accidents in which someone is injured or property damage is excessive will need to be reported to police.
If you find that the driver who caused the accident you were involved in had no insurance at the time, or holds a policy with limits so low as to not adequately cover the damage done, contact a personal injury lawyer familiar with the unique laws of Pennsylvania.
In most car crash cases, a car accident lawyer will be able to help get your medical bills paid, repair your vehicle, and handle the insurance companies who will likely attempt to settle the matter as quickly as possible. This is rarely to your advantage. Hiring an accident attorney to help manage your car crash can result in a better settlement, better long-term health care and an overall better outcome for everyone involved.
Philly Injury Lawyer have more than 60 years combined experience handling car accident claims and we have helped thousands of drivers recover lost wages, pay for medical expenses and get their lives back. Consultations are free, and you will only pay when we win.