PA Law Blogs » Insurance Law

What’s the Difference between Limited and Full Tort for Pennsylvania Drivers?

Nathaniel Ehrlich — Fri, 12 Aug 2011 14:09:33 +0000

All states have different laws regarding auto insurance. For Pennsylvania drivers, the “right to recover damages” is labeled as “tort options” in car insurance policies. An individual’s level of tort coverage defines his/her ability to seek compensation for an accident in which that person is injured by the actions of another driver. As part of the 1990 Motor Vehicle Financial Responsibility Law (MVFRL), policy holders are required to elect either “full” or “limited” tort coverage in Pennsylvania, and it’s important to understand the implications of both.

“Limited tort” plans give drivers limited rights for seeking monetary compensation for injuries caused by another driver. Specifically, the victim (and members of his/ her household) may only sue for monetary losses as it pertains to medical bills, lost wages, or other things that can be given tangible monetary worth. Because the insurance company is responsible for less coverage, “limited tort” premiums cost less than “full tort.”

When electing “full tort,” individuals (and members of their household) retain full legal ability to pursue monetary remuneration (including all medical and out-of-pocket expenses, pain and suffering, and other non-monetary damages) for any losses caused by another driver in a crash.

Sometimes, even when an individual has elected a limited tort policy, he/she is entitled to pursue additional monetary reimbursement for accidents resulting in serious injuries (law describes this as permanent disability, permanent disfigurement, death, etc), or potentially when the person is harmed by 1) an impaired driver, 2) an out-of-state driver, 3) as a pedestrian, and 4) in a commercial vehicle.

Issues involving auto insurance tort coverage can be extremely complex. If you’ve suffered an accident at the fault of another driver, you may wish to consult with a Pennsylvania car accident injury lawyer who can help guide you through the legal process.

How Much UM/UIM Auto Insurance Do I Need In Pennsylvania?

Nathaniel Ehrlich — Wed, 10 Aug 2011 20:06:13 +0000

Pennsylvania law requires all drivers to purchase and carry automobile insurance, however, the level of coverage is customized by the policy holder. Two optional, although important and often overlooked, components to motor vehicle insurance are Uninsured Motorist Insurance (UM) and Underinsured Motorist Insurance (UIM).

Unfortunately, you cannot assume that all other drivers possess auto insurance, even though everyone is legally obligated to. A surprising number of individuals, especially given the current depressed economic climate, violate the law by driving motorcycles, cars, trucks and other motor vehicles without insurance. In addition, many do not possess sufficient coverage to protect themselves or others in the event of an accident.

UM coverage protects you and your family against damages caused by uninsured drivers by enabling you to recoup from your own insurer. Similarly, UIM insurance guards you and your family if a driver causes more losses than he or she has insurance to cover. For example, if another driver has $30,000 in coverage, but causes you $50,000 in damages, your insurer’s UIM coverage would pay that difference of $20,000.

How much UM/ UIM insurance you require depends upon your unique financial and demographic circumstances, but given the high number of uninsured drivers, it’s best to carry as much coverage as possible. Because auto insurance is costly, and a lot of people struggle to meet their monthly expenses as it is, many opt for bare bones policies in order to save a few dollars in the short term. But insufficient car insurance leaves drivers vulnerable and can prove far more costly in the long run.

Typically, UM/UIM is relatively affordable. Review your policy to confirm that you have sufficient UM/ UIM coverage. If you’ve been injured in an accident involving an uninsured motorist, contact a qualified Pennsylvania automobile accident attorney to learn more about damages you may be entitled to pursue.

Erie Indemnity Co. Involved in Uninsured Motorist/Underinsured Coverage Stacking Dispute

Michael Monheit — Wed, 05 Jan 2011 13:56:35 +0000

Erie Indemnity Co., one of Pennsylvania’s main insurance companies, has found itself involved in an uninsured motorist (UM) and underinsured motorist (UIM) coverage dispute, which has grasped the attention of the Insurance Department.

According to The Legal Intelligencer, a collection of plaintiffs have sued Erie Indemnity Co. for depriving them of stacked UM/UIM coverage under its household exclusion cause. A summary judgment motion was denied by a Fayette County common pleas court judge last year in August in a class action suit against Erie. While the next step seems to be trial, the insurance company seems to still be trying to get the case out of the common pleas court’s jurisdiction and into the hands of Pennsylvania’s Insurance Department.

One possible reason that Erie wants the case to be addressed by the insurance commissioner is that the company may be able to claim that all of these insurance rate exclusions are legitimate as long as they were approved by the Insurance Department.

In response to the claims of one Waynesburg, PA family who filed for stacked UIM benefits after the father was killed and the mother was seriously injured in a motorcycle accident, Erie cited a 2009 Pennsylvania Supreme Court decision. In Erie v. Baker, it was decided that an insurance policy’s household exclusion clause could bar recovery of UM/UIM benefits in a claim relating to a vehicle owned by the insured by covered by a different policy provided by another company.

In initially denying Erie’s claim that the Insurance Department had chief jurisdiction of the case, the judge argued that the case actually centered around the insurance company failing to provide coverage for which it charged its customers, and did not focus on an opposition to premiums and rate.

As this case demonstrates, insurance rate litigation is an intricate process. However, while the aftermath of any auto accident presents many challenges for those involved, especially when insurance issues arise, these cases can be resolved no matter how complex they seem at first.

Philadelphia Insurance Fraud and Staged Car Accident Scheme

Michael Monheit — Mon, 02 Aug 2010 22:59:04 +0000

The thought of anyone staging an auto accident is quite shocking, especially if the intention is to deprive others of the financial assistance that insurance is supposed to provide. Car accidents in Philadelphia and throughout Pennsylvania take place frequently enough due to negligent motorists and for various other reasons without adding those running insurance schemes in the mix.

According to the Associated Press, a man has been sentenced to serve 4 to 10 years in prison for running an insurance fraud scheme that accumulated over $1 million. The man will also have to pay $440,000 in restitution to 17 insurance companies for the money he wrongfully cost them.

The man pleaded guilty to 44 counts of insurance fraud, 43 counts of theft, and other related charged. Over 116 people have been arrested for involvement in the insurance fraud scheme. Authorities have recognized that several staged vehicle accidents were created so that two cars were involved. This was done in order to heighten claim and settlement potentials by having six claimants per staged collision.

The article did not mention how many people suffered injuries as a result of these staged car accidents.

Day Care Mercury Contamination Case against Insurer Results in $208,000 Award

Michael Monheit — Thu, 22 Jul 2010 11:00:05 +0000

Mercury contamination is a serious issue and can make a building unsafe to inhabit due to potential health risks. Two owners of a day care in New Jersey shut down their business only to be informed on the same day by state officials that high levels of mercury on the premises, which used to be a thermometer factory, made it unsuitable for habitation. Lawsuits against the day care owners shortly followed with two being willingly dropped and three still pending in addition to two class action suits.

A $208,748 award has been approved by U.S. District Judge Jerome Simandle in the case, Baughman v. U.S. Liability Insurance Co. U.S. Liability Ins. Co. is also expected to pay $82,695 to compensate the insureds, who owned and ran the Kiddie Kollege Daycare & Preschool in Franklin Township, N.J. The Legal Intelligencer reports that the liability carrier had previously lost its bid to refuse to defend claims over the contaminated building.

Aside from the day care center owners, defendants in the pending lawsuits include the state and Accutherm Inc. The state is being accused of knowing that the building used for the day care center has been contaminated since 1987. Accutherm Inc. is involved in the lawsuits for allegedly making the mercury thermometers on the contaminated land from 1984 to 1990.

The Centers for Disease Control and Prevention’s Agency for Toxic Substances & Digestive Registery reports that young children are more sensitive and susceptible to harm from mercury exposure than adults. Nervous and digestive systems and kidney problems may manifest in children exposed to mercury. For more information on mercury and your health, click here.

City and Not Insurance Company Must Pay Claim, Federal Court Rules

Michael Monheit — Fri, 16 Jul 2010 11:00:40 +0000

A federal appeals court in Pennsylvania has ruled that the city of Easton, and not its insurance company, must pay a multi-million dollar settlement with the widow of a police officer who was accidentally shot by another officer inside the police department’s headquarters.

According to an Associated Press news report, the appellate court reversed a federal court’s decision that the Scottsdale Insurance Company should pay claims against the city with regard to this issue. The police officer was killed during a training exercise in March 2005. The appellate court stated Scottsdale does not have to pay the $5 million settlement with the officer’s widow.

Insurance law can be extremely complex. It is important for victims of personal injuries or families of deceased victims filing wrongful death claims to understand insurance laws. Victims can unnecessarily get stuck between two entities as they battle over who is responsible for making the payment. It is unfortunately the victim who gets caught in the middle and suffers the consequences.

Consumers Filing Insurance Claims

Deborah Forrister — Tue, 11 May 2010 12:00:47 +0000

For any consumer looking for the insurance policy that works best for them, he or she hopes to never actually have a reason to file an insurance claim. However, the unexpected often happens in which consumers should be able to rely on their insurance company to uphold their end of the bargain as a business serving the consumer in need.

While there are many factors to consider when filing an insurance claim, the National Association of Insurance Commissioners provides a framework of suggestions for insurance claim filing that can help consumers. To begin with, it is extremely important to educate yourself regarding the specifics of your particular policy in terms of deductible value, what is covered, and what is exempt from coverage. In far too many situations, a consumer will file an insurance claim much later than he or she should have. Allowing bills and receipts to accumulate without contacting your agent or company can potentially affect how much you receive in your claim. Another vital component of this process is to be absolutely positive that you have provided your insurance company with all valid information to its entirely. A delay in the process of your claim could occur if incorrect or incomplete information is given.

When filing an insurance claim, remember to maintain and organize your time and expenses as you correspond or communicate with your provider. It’s helpful to retain copies and records of all interactions. You may also want to write down and document telephone or face-to face communications by documenting names, dates, titles of workers that you speak with, and what was stated during the discussion of your policy and/or insurance claim.

While some individuals may feel intimidated when dealing with an insurance company, you should never hesitate to ask any questions, even if in disagreement about a claim settlement. If a claim happens to be denied, you can request a written letter that explains the reason for the denial and the exact policy language under which the claim is not being approved. Policies can sometimes be interpreted differently by the insurance company and the policyholder. It is for this reason, and many others, that you may not want to jump at the chance to accept the first offer of settlement presented by your insurance company. Instead, it is possible that you may be able to negotiate a settlement that you feel is more accurate and fair to your specific situation. Insurance lawyers can often help policyholders determine the difference between a settlement that is fair and one that denies a consumer of the full support they deserve.

Flood Insurance Coverage May Leave Homeowners Dry

Deborah Forrister — Wed, 21 Apr 2010 19:35:23 +0000

Many residents in Pennsylvania and throughout the United States have been unable to sell their homes since the National Flood Insurance Program (NFIP) ended in March. A Philly Burbs story discusses one Harrisburg-area family’s difficulty in selling a house that is situated on a flood plain. Their frustration, according to the article, stems from having to pay taxes on the property, but being unable to sell it. Meanwhile, prospective owners showed interest in their property but could not get the necessary flood insurance required in order to do so.

While left in homeowner limbo, the Federal Emergency Management Agency (FEMA) reports that the NFIP is over $18 billion in debt. In taking 18 days “off” in April, the NFIP created problems with the sale and re-financing of thousands of properties within flood plains throughout the United States. With the Senate voting to extend the flood insurance program within a $7.5 billion spending program, President Obama signed the bill, which also funds defense programs and unemployment benefits.

While FEMA does not call for flood plain homeowners to buy flood insurance, several mortgage companies do. Those who have not spent years becoming highly familiar with the ins and outs of insurance law may find these complex – and at the moment, unstable – matters tough to grasp.

FEMA reports that the typical annual premium for a policy under the NFIP amounts to approximately $500 a year. In cases similar to the family in Harrisburg mentioned above, those wishing to sell their home must act now because the extension only lasts until May 31. Time is of the essence even though government officials will be working to develop a long-lasting solution to the NFIP program debt that has been denying Americans the flood insurance they need to settle their property matters. If homeowners are frustrated now, let us hope that a solution is created by the time the extension reaches its end.

Health Care Reform: Insurance Policies to Offer No-Cost Preventative Care

Michael Monheit — Wed, 14 Apr 2010 12:00:48 +0000

Whether you support or oppose the new health care reform plan, it’s tough to argue that no-cost preventative care as part of a health insurance policy may help improve the finances and well-being of several Americans. A New York Times story discusses how the new health care plan will include immunizations, cancer screenings and checkups, which are considered preventative services, as part of an individual or family’s insurance policy. This means that no additional cost will be necessary to cover efforts to prevent illness, cancer and disease.

In diminishing any out-of-pocket charge for preventative services, the idea is that people will be healthier because they won’t be avoiding certain helpful actions with cost in mind. With more and more Americans in better health as a result of utilizing preventative health services, the overall amount of money being spent on various treatment, prescriptions, and other medical costs should diminish. In addition, if all goes according to plan, less people should become ill and cancer should be detected in earlier, more treatable stages, thus lowering incidents of cancer misdiagnosis.

The President of the National Business Group commented that this aspect of the health insurance plan is “focused on improving an individual’s health and identifying risk factors.”

Those in the insurance law field understand the significance of free preventative care included in health insurance policies. This type of coverage has already been incorporated into large business’ employee health plans to encourage workers and their families to live healthier lives. This type of approach is geared towards lowering overall health care and treatment expenses by preventing the need of these services to begin with.

Based on the article, a benefits consulting firm’s 2009 survey revealed that three out of four large companies provide free preventative health services to employees. While several details of the new health care plan are still being worked out, smaller businesses and individual health plans may find a way to offer similar benefits for achieving overall well-being in making preventative care a part of the insurance policy without any extra fee.

California Takes on Health Insurance Rate Hikes

Michael Monheit — Mon, 29 Mar 2010 14:00:51 +0000

State governments are taking a close look at the policies of large state health insurance companies after some extreme rate hikes caused uproar in California.

A recent report from MarketWatch shows that Anthem Blue Cross of California recently hiked premiums up to 39 percent. The move attracted the wrong kind of attention from residents and state lawmakers, as well as the President who warned that more of the same might be in store if America doesn’t pass health care reform.

In the report, Blue Cross officials cite “underlying medical cost growth” for the rate hikes. They also say that healthy people choosing not to get health insurance leaves the market with a consumer base that is more expensive.

Advocacy groups have weighed in, saying this just proves what they have been saying all along—that a private for-profit health insurance system does not work.

The MarketWatch report also mentions Mega Life and Health Insurance in California, where estimated rate hikes reach 25 percent. Public hearings will shed more light on the practices of these companies. These cases highlight a fundamental problem with for-profit health insurance in a down economy; when consumers find that health insurance is out of their financial reach, they will elect to stop buying it. This has a negative effect on the providers, some of whom raise rates further. Other critical issues with America’s individual health insurance system include the “emergency room” care strategy, where those without insurance simply visit emergency care centers for their healthcare needs.

Most Americans and lawmakers agree that something has to be done about health insurance, but debates over a solution continue to leave major reforms undone. State efforts may help provide a window into how the government can deal with rising costs of individual and group health insurance. Those involved in insurance law will want to look at how emerging legislation will change the needs of their clients.