Joel Feldman

Anapol Schwartz

Date: 7/1/2004

Duration: 13:24

Joel Feldman helps viewers understand their Pennsylvania automobile insurance policies.

Video Transcript

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Joel Feldman: Pennsylvania Automobile Insurance: Understanding Your Options and Policy Coverage.

Hi, I'm Joel Feldman and I've represented hundreds of people involved in automobile accidents over the years. If there is an automobile insurance policy, that's one of the first things I need to see in order to help you. The automobile insurance policy sets forth under some circumstances, whether or not a suit can be brought to recover all the damages sustained. It also sets forth various coverage to pay medical bills, replace loss income and protect when the driver who caused the accident doesn't have insurance at all, or has very minimal coverage.

Let's see if I can help you understand your policy, some of the options you have, and answer some of the most frequent questions that arise when I meet with clients and we examine their policy.

After discussions with your insurance agent, you will be provided with an insurance policy. Generally, the first page of that policy sets forth all the coverage. This is called a declaration page. The declaration page is much easier to understand if you keep in mind there are really only two different parts to it. One, there is the liability coverage.

This sets forth the protection that you have from your insurance company when someone who alleges that you caused the accident makes a claim against you. Two, the rest of the declaration page merely sets forth the benefits and coverage that protect you or your family when the other drive has caused the accident.

Let's take a look at the liability coverage. Here you can see that the liability coverage is stated to be $100,000 per person and $300,000 per accident. What this means is if you were driving your car and caused an accident; let's say you weren't paying attention, went through a stop sign and ran into another motor vehicle.

If, as a result of the accident, one person were injured, your automobile insurance company would provide you with up to a maximum of $100,000 in the event the injured person made a claim or sued you. If it was more than one person in the car, and there were multiple claims, no matter how many persons were injured, your insurance company would only pay the maximum $300,000. No one person making a claim against you would be entitled to receive more than $100,000.

I'm frequently asked what amount of liability coverage is enough to protect you in the event you were sued. The answer to that question, like many other questions concerning automobile insurance, depends on a number of factors that can be personal to you.

In other words, there's no right answer for all persons. The factors include what assets you have that need to be protected in the event the person injured has damages that are far in excess of your policy limits. In other words, if you only had $100,000 of liability coverage, and one person made a claim, and that claim was worth $500,000, would the injured party be able to take any of your personal assets? Your house, cars or business? Those are issues that you need to address with your insurance agent.

The next area I'd like to focus in on is the property damage coverage. Let's go back to our accident, where you caused the accident and went through a stop sign. In addition to causing personal injuries, the other driver's car is totaled. Under this policy, there is a $25, 000 property damage coverage. What would happen if the other car that we totaled were a BMW or a relatively expensive car worth more than that coverage?

You would potentially be exposed to having to pay a claim against you for the property damage you caused in excess of the $25, 000. Your responsibility to pay property damage is also not limited to the other vehicle involved in the accident. It also includes other types of property including telephone poles, homes and businesses.

The rest of the declaration page sets forth the coverage that protects you or your family incase of an accident. The first thing you determine is your tort selection. In Pennsylvania, you have the option to have either full tort or limited tort. Full tort means that your right to sue and recover some items of your damages is not limited at all.

In other words, if you have full tort, you and your family members who are covered under your policy can recover all the items of damage that were caused by someone else, without regard to how badly injured those covered by the policy had been. If you have limited tort, your family member must have sustained a serious injury before you can recover all items of your damages.

The items of damage that we're talking about with respect to tort thresholds are those that are generally called pain and suffering. The definition of what is a serious injury, which will permit someone who has chosen a limited tort option to recover for their pain and suffering damages, needs to be made on a case-by-case basis.

When I last checked in Pennsylvania, there was an approximate 15 percent extra premium for full tort as opposed to limited tort coverage. Once again, whether to select full tort or limited tort is a decision that you must make after discussing with your insurance agent with consideration for cost-savings balanced against not limiting your right to recover all items of damage including pain and suffering.

In Pennsylvania, the insurance agent must give you a special form to sign indicating whether or not you would like to select full tort or limited tort coverage. If you select limited tort coverage, you will have been deemed to waive or give up full tort coverage.

Now I'd like to talk to you about uninsured and underinsured motorist protection. Let's face it; we all know there are a lot of people driving who don't have automobile insurance. If you are involved in an accident where it's the other driver's fault and they have no insurance; if you have selected uninsured motorist protection, your own insurance company will pay for the damages up to the stated limit. In other words, your insurance company will take the place of the defendants' insurance company and pay your damages up to the policy limit.

In this declaration page that limit is also $100,000 like the liability coverage. Let's say that in the same accident the other driver did have insurance but only had the minimal liability coverage of $15,000 and your injuries and damages were worth well in excess of that $15,000. If you'd selected underinsured motorist protection, after obtaining the $15,000 liability coverage from the insurance company for the person who caused the accident; you would then turn to your own insurance company for the difference.

Under this particular policy with one $100,000 of underinsured motorist's protection, after paying the $15,000 liability coverage from the insurance company for the party that caused your accident you would then take, possibly, an additional $100,000 from your own company.

In Pennsylvania, you are permitted to purchase uninsured and underinsured motorists coverage up to, but not in an amount greater then your liability coverage.

When you meet with your agent, you will be asked to make a decision as to whether, or not, you want uninsured or underinsured coverage or whether, or not, you will give up or waive your right to have those coverages. There are specific forms that have to be utilized in which you have to sign to indicate your selection.

Now I would like to turn to stacking. When it comes to uninsured and underinsured motorists coverage there is also another choice you must make. In addition to making the choice as to whether you even want those coverages you are also entitled to make a choice as to whether or not you would like to stack those coverages.

Stacking simply refers to adding the maximum limit of coverage per vehicle. In our declaration page from our policy, we have two vehicles with one $100,000 of uninsured and $100,000 of underinsured coverage. If we selected the stacking option, we would be able to recover up to $200,000 per person.

If you decide, you did not want stacking, in order to save a premium dollar you would only be able to recover $100,000 even though you had two cars insured on the policy; again, like all the other choices there are specific forms that you must sign when you apply or insurance indicating whether or not you desire to pay the extra premium and have the benefit and protection of stacking or whether or not you waive or give up your right to have the stacking coverage.

Now to summarize you are not required to select full tort over the limited tort coverage. That is an option and it costs more to have full tort coverage, but it does provide you with peace of mind of knowing you will always be able to bring a claim to recover all your damages, including pain and suffering, without regard to the seriousness of the accident. You will also have the option to select uninsured and underinsured motorists coverage as well as whether or not you would like to stack those coverages.

Often I see policies where I see liability coverage, but there has been a rejection or waiver of uninsured or underinsured motorists coverage.

Under those circumstances premium dollars have been spent to provide a benefit to someone outside of your family in the event you cause the accident, but premium dollars were not spent to provide a benefit to you or your family members.

With respect to all decisions concerning insurance coverage, you are the only who can make the decision as to whether or not you can afford to or want to pay the extra premiums for the protections that can be purchased.

Continuing on with coverage that provides benefits for you or your family there is a grouping of benefits entitled first party benefits. They are benefits that are payable to you and your family without regard to who caused the accident. In other words these benefits will still apply to you or your family even if you or a family member were at fault and caused the accident.

Let's start with medical benefits. In this policy, you can see that the medical benefits are at $10,000. What this means is that your insurance company would pay the first $10,000 of your medical expenses from injuries arising from the accident. When that ten thousand limit is used up you would then turn to alternative sources including your own medical insurance. If you did not have medical insurance you would be personally responsible for those additional medical expenses beyond our medical benefit limit.

A ten thousand dollar medical benefit is the most common benefit, but there're many options where you can purchase higher medical benefits for additional premium dollars.

Work loss benefits simply pay for any lost wages you incur as a result of being injured and not being able to return to work. This particular declaration page has a fifty thousand dollar work loss benefit and it indicates that it's payable at a maximum of $2,500 per month.

I hope that this has cleared up some of the mysteries surrounding automobile insurance policies and various coverages. With this information, you should be able to make better decisions and more informed decisions concerning your specific automobile insurance policy and the coverages that are best for you.

All insurance policy selections will ultimately be driven by costs. My recommendation to you is to seriously consider selecting the full tort option so that your rights to sue and recover all damages, including pain and suffering, are not limited. Also, to select the uninsured and underinsured motorists benefits equal to your policy liability limits.

There are many drivers who have no automobile insurance or very limited automobile insurance liability coverage. Uninsured and underinsured motorists coverage will provide protection for you and your family under those circumstances.

If you're insuring more then one car in the policy you must also consider whether or not you would like to have stacked coverages so that you can indicates that our insurance policy where there were two cars double your uninsured and underinsured motorist coverage.

I frequently meet with people; and unfortunately have to advise them that as a result of a decision they made in selecting their applicable insurance coverage they can't bring a lawsuit or the amount of coverage available doesn't properly compensate them for all of their injuries and damages.