Liability insurance coverage protects you in the event that you cause a car accident which results in property damage and/or personal injuries. Pennsylvania law requires a minimum of $5,000 for property damage and $15,000 of coverage for each person and a total of $30,000 per accident for bodily injury. Property Damage Coverage protects you from property damages resulting from accidents that you cause. Bodily injury coverage protects you from claims brought by the people whom you injure in a car accident. Since it is not difficult to imagine a scenario under which the minimum liability coverage would not be enough coverage to pay for the damages caused by a car accident, we recommend you consider carrying much more than the state required minimum. You should discuss the issue of how much liability coverage is appropriate with your insurance agent. From a legal perspective, I believe that you should have sufficient coverage to protect the value of your personal assets from potential legal claims. The more assets you have, the more insurance you should have.First party coverage

Under Pennsylvania law, the coverage on your own car insurance policy determines how much you will initially receive by way of payment of medical bills, reimbursement of lost wages, payment of funeral expenses and payment of death benefits, regardless of who is at fault for a car accident. This coverage is called first party benefits. The only required first party benefits coverage is $5,000 worth of medical coverage. You are not required to have any coverage for lost wages, funeral expenses or death benefits. Nevertheless, depending on what other insurance you have, it is often advisable to carry much more than the state required minimum of $5,000 of medical coverage, as well as significant coverage for lost wages, funeral expenses and death benefits. If you have health insurance with deductibles or co-pays, it is better to have more medical bill coverage under your automobile policy since deductibles and co-pays do not apply. In addition, if you do not have very good short or long-term disability coverage, wage lost protection is advisable. Similarly, if you do not have substantial life insurance, funeral expense and death benefit coverages are important to consider.

Uninsured and underinsured motorist coverage

There are tens of thousands of people driving in Pennsylvania with little or no car insurance. Statistically, these drivers are guaranteed to cause accidents and injuries and will have little or no ability to pay for the damages caused by their carelessness.

Luckily for you and your family, there is car insurance coverage which you can purchase to provide protection from these irresponsible drivers - uninsured and underinsured coverage. If you have the foresight to purchase uninsured and underinsured coverage in adequate amounts, you and your family will be protected in the event that you fall victim to an accident caused by an uninsured or underinsured driver.

Uninsured motorist coverage provides protection for an accident caused by a driver of a vehicle who has no insurance or who leaves the scene of an accident and cannot be located - a hit-and-run driver. If you were injured in an accident caused by an uninsured or hit-andrun driver and had no uninsured coverage, you would have no way of seeking compensation for your injuries. uninsured coverage, however, protects you in such a situation. If you have such coverage, your insurance company must compensate you for your damages up to the amount of the coverage that you purchased.

Underinsured motorist coverage provides protection for an accident caused by a driver who has automobile liability coverage, but not enough coverage to pay for all of the injuries and damages resulting from an accident. For example, if a driver having only the state required minimum liability coverage of $15,000 causes $100,000 worth of injuries and damages to you, that driver is underinsured by $85,000 ($100,000-$15,000 = $85,000). In such an accident, if you were covered by an underinsured motorist policy, you would be able to seek compensation from your own insurance company in order to make up the difference between the coverage the injured driver had and the full amount of your injuries and damages.

In my opinion, it is critical that you purchase uninsured and underinsured motorist coverage on your own policy in substantial amounts in order to protect you and your family from uninsured or underinsured drivers.

Stacked coverage

In addition to charging a substantial amount of uninsured and under-insured coverage, you should also choose to "stack" your coverage. "Stacking" provides extra coverage by multiplying the amount of coverage by the number of vehicles insured under your policy. For example, if you stack coverage limits of $100,000 on a three-vehicle policy, you are actually insured for three times the face amount of the $100,000 policy ($100,000 x 3 vehicles = $300,000). Because "stacking" coverage is relatively inexpensive, I believe that it is always a good idea to consider purchasing Stacked Coverage.

Limited tort vs. full tort

In 1990, the Pennsylvania legislature created the limited tort vs. full tort election for the purpose of decreasing car insurance costs. Before such an election was created, every person injured in a car accident retained the legal right to seek full compensation for any injuries and damages suffered in a car accident. With the change in the law, the Pennsylvania legislature allowed the purchaser of car insurance to get a lower premium by selecting limited tort. The tradeoff, however, was limited legal rights to be compensated in the event of a car accident. The election of limited tort led to a waiver of the right to seek certain types of compensation, unless the injury was deemed "serious" or certain other limited exceptions applied. More specifically, a person selecting limited tort was allowed to recover "economic" damages that included things like unpaid medical bills or lost wages. However, "non-economic" damages for pain and suffering, emotional distress or restrictions on activity could not be compensated.

The decision of whether to elect limited tort or full tort is a personal one. Limited tort is less expensive coverage, but significant legal rights are waived through the election. In my years of practice, I have seen many clients switch from limited tort to full tort after having been involved in an accident and having their legal rights affected by the limited tort election. In my view, it is unwise to significantly limit your legal rights in exchange for relatively minor insurance premium reductions.

o Tim Rayne is a partner in the full-service law firm of MacElree Harvey, Ltd. which has 27 attorneys in offices located in Kennett Square and West Chester and Centreville, Del. Tim focuses his law practice in personal injury and civil litigation law, primarily helping people who have been injured in accidents deal with insurance companies. Tim can be reached at 610-840-0124 or trayne@macelree.com. For more News and Information on Personal Injury law, check out Tim's Blog at www.macelree.com/traynelaw.

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