When a car accident happens, victims are typically compensated for their losses by the other at-fault driver’s auto insurance policy. Polices of auto insurance can be complicated and are sometimes difficult for consumers to understand; however, there are several basic features of auto insurance policies of which consumers should be aware.
BASIC FEATURES OF AUTO INSURANCE POLICIES
- Bodily Injury Liability Coverage
This coverage exists to protect the policyholder when they are the at-fault driver in an accident. It is the main source of compensation available to injured car accident victims. Pennsylvania law requires that all vehicle owners maintain a minimum of $15,000 in bodily injury coverage per individual ($30,000 per accident), but owners can (and should) consider purchasing more than the minimum to protect their personal assets.
- Personal Injury Protection (PIP)
Pennsylvania polices are required to have $5,000 in Personal Injury Protection (PIP), which pays for some of the medical expenses incurred after an accident. PIP is a “no-fault” coverage, meaning that regardless of which driver was at-fault, some of the policyholder’s medical expenses, as well their passengers’ expenses, will be covered.
- Collision Coverage
This pays for damage to the policyholder’s vehicle following an accident. This coverage is available for vehicle repairs even if the policyholder is at-fault in the accident.
- Comprehensive Coverage
Comprehensive coverage covers losses caused by something other than a motor vehicle collision. For example, if the policyholder sustains a loss due to theft, fire, water damage, or contact with an animal, the damage will be covered by insurance.
- Uninsured (UM) and Underinsured Motorist Coverage (UIM)
If the policyholder’s vehicle is hit by a driver without auto insurance or who flees the accident scene (a hit-and-run), uninsured motorist coverage (UM) is there to cover their losses. Underinsured motorist coverage (UIM) applies in situations where the other at-fault driver may have insurance, but their policy limits are insufficient to cover the victim’s losses.
- Limited Tort vs. Full Tort Insurance Policies
Pennsylvania insurance policies are full tort policies by default. This means that when an accident happens, victims are entitled to reimbursement for economic losses, like medical bills, as well as compensation for pain and suffering. Consumers also have the option to select limited tort policies of insurance. While these limited policies come with lower premiums, limited tort policyholders give up their right to receive compensation for pain and suffering after an accident. For more on this topic, see our article: Limited Tort vs. Full Tort in Pennsylvania.