Here are 11 terms you should be familiar with when purchasing auto insurance in Pennsylvania.
- Bodily Injury Liability
- Declarations Page
- Property Damage
- Collision Coverage
- Comprehensive Liability
- Litmited Tort
- Full Tort
- Uninsured Motorist Coverage
- Under Insured Motorist Coverage
Bodily Injury Liability Insurance is a required coverage for all drivers in Pennsylvania. It provides coverage for an injury that was caused by the insured driver. It could involve injury to a pedestrian, biker, or the driver or passenger of another car. It is sold with a minimum coverage of $15,000 per person and $30,000 per accident. That minimnum amount means that no one can recover more than $15,000 and a total of $30,000 no matter how many people are injured.
For a serious accident, that is not enough coverage. If that is all you have in coverage, you could be exposing yourself to personal liability for damages you may cause.
The “Declarations Page” of an insurance policy is where the policy lists coverage and how much premium was paid for each type of coverage.
Property Damage Liability Insurance covers damage to someone else’s car. It does not cover the bodily injury damages mentioned above. We recommend a minimum of $25,000 in property damage coverage to protect them for damages to a moderate new car. Again, that will not be enough coverage for damage to an expensive new car! So you may want even more covereage than that to protect yourself.
For damages to your own car, you need collision coverage. Remember that Collision coverage usually has a deductible which is the amount you will have to pay out of pocket. While a larger deductible gives you lower premiums, it also gives you higher exposure to risk.
Next is comprehensive coverage which is similar to the property damage coverage, but instead covers damages to other types of property.
PIP or Medical Payments Insurance Coverage works like your health insurance, except only for car accidents. In PA, it is no-fault – so the medical bills get paid by your own insurance no matter whose fault the accident is. This covers medical bills for you as well as family household members, and passengers in your car. PIP stands for "personal injury protection." We recommend that our clients purchase a $1,000,000 policy that includes extraordinary medical expenses in the unfortunate event of a serious or catastrophic injury. Likewise, you should purchase wage loss coverage (kind of like disability insurance) that will cover wage loss up to the policy limits, at the rate of 80% of your lost wages.
Full Tort or Limited Tort threshold for motor vehicle accidents determine what types of injuries will qualify for claims. This is a very important decision. By choosing the “wrong” threshold, you will substantially limit your rights. Do not choose “limited tort” insurance. You only save a little bit of money and give up a lot of rights. Therefore, we tell our clients taht they should purchase “full tort” coverage. “Full tort” insurance ensures you have full rights to pursue a claim if you are in a motor vehicle accident. With “Full Tort” you can be fully compensated for out of pocket expenses as well as pain and suffering.
Uninsured Motorist and Uninsured Motorist is needed when you are injured as a result of the negligence of another driver, you want to be compensated for these injuries. Depending on the choices made by the negligent defendant driver to have (or not have) enough insurance coverage, your right to recover damages can be limited. And it is possible that they will have no overage at all! To protect yourself, get UM and UIM coverage up to the full amount of your liability coverage.
Finally, if you have multiple cars, then you should select stacking. With stacking, you can get additional coverage for each car. Litteraly stack one coverage on top of the other for more insurance.
If you have questions on comments about your insurance policy decisions, please feel free to post them below.