Car insurance can be confusing. No-fault, PIP, limited tort, full tort, liability, comprehensive, collision – what do these terms mean? We’re going to break it down for you.
If you need more information about what options you may have after a car accident, contact the experienced attorneys at Aversa & Linn.
What do I need to know about car insurance?
Before we get into details, let’s back up and look at the overall picture. States have different laws about car insurance.
The important things to know about the laws in your state are:
- Are you required to have car insurance, and if so, how much?
- Do you file a claim with your own insurance carrier, regardless of fault?
- Is your ability to sue after a car accident restricted?
- What are the state’s minimum and maximum coverage amounts?
Before the 1970s, whenever there was a car accident, how much money was recovered, by whom, and from whom, depended on who was found to be at fault. Determining fault was an expensive and time-consuming process.
States began to pass no-fault laws, which allowed accident victims to recover from their own insurance companies for certain financial losses like medical bills. In these instances, no fault was determined. Whoever was at fault, the individual submitted a claim to their own insurer. The hope was that by removing small claims from the court system, costs of car insurance could be lower for everyone.
Important terms
The idea may have been to keep costs low, but the differing car insurance systems can be confusing. Here are some terms to help you understand car insurance.
No-fault: States with no-fault car insurance laws require drivers to file a claim with their own insurance company after an accident, regardless of who was at fault. In some no-fault states, drivers can sue for pain and suffering if their injuries meet certain conditions, but in certain circumstances, accident victims may not be able to recover for any type of pain or suffering caused by the accident.
PIP: PIP stands for personal injury protection. PIP will cover medical expenses as long as the treatment is related to injuries suffered in the car accident. PIP may also cover income loss depending on the coverage.
Lawsuit limitations: In a few states, including Pennsylvania and New Jersey, drivers may be limited in their ability to bring a lawsuit depending on their insurance coverage.
In Pennsylvania, drivers choose either the Limited Tort option or the Full Tort option when purchasing auto insurance. Choosing the Limited Tort option results in a cheaper premium, but it may prevent you from recovering any money after a car accident, even if you are injured.
With Limited Tort coverage, you will not be able to make a claim for non-economic damages (i.e. pain & suffering or loss of life’s pleasures) unless you can prove one of several limited exceptions, or that you suffered a “serious impairment of a body function.” Even if you have a serious injury, the law does not clearly define which injuries qualify as a “serious impairment of a body function.” This means that either a judge or jury will decide if your injury fits into that category, and it is subjective. Learn more about Limited Tort and Full Tort.
Liability insurance: Liability insurance covers the costs of an accident for which you’re found legally at fault. Liability coverage usually covers bodily injury and property damage. Most states require drivers to carry a minimum amount of liability coverage before they can register and operate a vehicle in that state.
In Pennsylvania, drivers are required to have the following minimum amounts of liability insurance on their motor vehicle:
- $15,000 for bodily injury or death of one person
- $30,000 for bodily injury or death of two or more persons in the same accident
- $5,000 for property damage
Collision insurance: Collision insurance pays for repairs to your car if it is damaged in an accident, even if you are at fault.
Comprehensive insurance: Comprehensive insurance pays for damage to your car that does not occur in a car accident. For example, a cracked windshield, a stolen car, damage by weather can all be covered by comprehensive coverage.
Modern Family – Gloria’s accident – who was at fault?
In an early episode of Modern Family, Mitchell is helping Gloria after she has a car accident. She claimed a guy cut her off, but Manny, her son and the only other witness, tell Mitchell privately that Gloria was at fault, that she cut off the other driver, causing the accident. “Everyone looks parked when you’re going 100 miles an hour.”
If Gloria lived in a no-fault state, she would be able to file a claim for any medical costs with her own carrier even if the accident was her fault.
If Gloria lived in Pennsylvania and she was not at fault for the accident, then her tort selection could be an issue. If she had elected Limited Tort coverage, in order to receive any payment for her non-economic damages like pain and suffering, she would have to prove that she suffered a “serious impairment of a body function” or that she meets one of the limited exceptions. Whereas, if Gloria had Full Tort coverage, she could also receive payment for her non-economic damages like pain and suffering regardless of how serious her injury was.
Contact Aversa & Linn for more information about your options after a car accident in Pennsylvania or New Jersey.
