Automobile Insurance Law Update

Under Pennsylvania’s automobile insurance law, automobile owners are given the option of choosing between two types of automobile insurance coverage. The one type of coverage is known as full tort coverage. The other type of coverage is known as limited tort coverage.

The choice of limited tort coverage or full tort coverage is presented to automobile owners at the time of issuance of their automobile insurance policy. If you desire limited tort coverage you are required to sign a form electing this type of coverage. If you do not sign the form electing limited tort coverage, you are automatically given full tort coverage.

Many people are not aware that the type of automobile insurance coverage they select can have serious ramifications. Instead, they often select the limited tort coverage merely because it is cheaper than the full tort coverage.

The difference between the two types of coverage is actually quite simple. Under either type of coverage, the insured is entitled to recover financial compensation for economic loss sustained as a result of an automobile accident caused by the fault of another. Economic loss includes items such as medical expenses, property damage loss, wage loss, and other out-of-pocket expenses.

However, if you select limited tort coverage you may be barred from recovering financial compensation for non-economic losses caused by the fault of another. Most notably, non-economic losses include claims for pain and suffering.

On the other hand, if you have selected full tort coverage, or if you are given full tort coverage because you have not selected either type of coverage, you retain the right to recover financial compensation for non-economic losses such as pain and suffering. This is of vital importance since the pain and suffering aspect of an automobile accident claim is often the aspect for which the insured is entitled to the most financial compensation.

Note that there are exceptions to the general rule that limited tort insureds cannot make claims for non-economic losses such as pain and suffering. The most notable exception is that the limited tort insured can make a claim for non-economic losses if he has suffered an injury which is serious. A serious injury is defined as one which results in death, a serious impairment of a bodily function, or a permanent disfigurement.

While there is little guidance in the law as to what qualifies as a serious impairment or a serious disfigurement, these standards appear to require a quite severe injury before a limited tort insured can recover financial compensation for non-economic losses such as pain and suffering. For example, if a limited tort insured is in an automobile accident and suffers a back pain which persists, but which does not seriously impair a bodily function, he may not be able to recover financial compensation for pain and suffering. This example emphasizes the importance of considering all factors when selecting the type of insurance coverage, as opposed to merely considering the lesser cost of the limited tort coverage.

Lastly, keep in mind that there are additional exceptions which allow a limited tort insured to recover financial compensation for non-economic losses such as pain and suffering. Therefore, if you have limited tort coverage, and suffer injury as a result of the fault of another, you should obtain legal advice before concluding that you cannot make a claim for non-economic loss.