Option G: Understanding Pa Auto Insurance Costs

Pennsylvania drivers are legally required to have auto insurance, and the minimum coverage levels are $15,000 per person and $30,000 per accident in bodily injury liability, $5,000 per accident in property damage liability, and $5,000 per accident in personal injury protection (PIP) coverage. The cost of car insurance in Pennsylvania varies depending on factors such as the driver's age, driving history, and credit score. The average cost of car insurance in the state is $2,450 per year for full coverage and $514 per year for minimum coverage.

Full tort vs. limited tort car insurance

In the US, 38 states are tort states, meaning the at-fault driver is financially responsible for any damage and injuries caused to others in a car accident. The remaining 12 states, plus Washington, D.C., are "no-fault" states, where drivers must purchase personal injury protection (PIP) to cover their medical bills, regardless of who caused the accident.

Three states—Kentucky, New Jersey, and Pennsylvania—are considered "choice" no-fault states, where drivers can choose between full tort insurance, limited tort insurance, or no-fault insurance coverage.

Full Tort Insurance

Full tort insurance allows individuals to sue an at-fault driver for medical expenses, lost income, vehicle repairs, and pain and suffering. This type of insurance is more expensive than limited tort insurance, but it gives the policyholder the unrestricted right to sue for pain and suffering after an accident, regardless of the severity of their injuries.

Limited Tort Insurance

Limited tort insurance restricts the policyholder's right to sue the at-fault driver for pain and suffering unless their injuries are severe or meet certain legal thresholds. This type of insurance is less expensive than full tort insurance, but it may result in more out-of-pocket expenses if the policyholder is severely injured in an accident and unable to claim pain and suffering damages.

Exceptions to Limited Tort Insurance

Even if a person injured in a car accident chooses limited tort insurance, there are exceptions that still allow them to sue for pain and suffering:

• The driver at fault was under the influence of alcohol or drugs
• The driver's vehicle is registered out of state
• The driver intended to hurt the victim
• The driver does not have insurance
• The injured party was a passenger on a commercial vehicle or a motorcycle
• The injured party was a pedestrian or bicycle rider

Personal Injury Protection (PIP)

In the state of Pennsylvania, drivers are required to have at least the minimum amounts of coverage for their vehicles to be on the road. The minimum limits for auto insurance in Pennsylvania include:

• Bodily injury liability coverage: $15,000 per person and $30,000 per accident.
• Property damage liability coverage: $5,000.
• Uninsured motorist coverage: $15,000 per person and $30,000 per accident.
• Underinsured motorist coverage: $15,000 per person and $30,000 per accident.
• First-party benefits: $5,000.

While Pennsylvania does not specifically mandate Personal Injury Protection (PIP) coverage, it does require a similar type of coverage called First-Party Benefits, which provides a range of medical benefits. The minimum coverage required is $5,000, but drivers can choose higher coverage amounts if they wish.

PIP coverage is available primarily in no-fault states, and Pennsylvania is a tort state, which means that someone must be at fault for an accident. However, even in a tort state like Pennsylvania, PIP coverage can still provide benefits. In a no-fault state, if a policyholder is injured in a car crash, their own policy will pay for their medical care, regardless of who caused the accident. This is similar to how PIP works, and it can provide valuable protection in the event of an accident.

The cost of PIP coverage can vary depending on the state and the insurance company. In some states, the minimum coverage amount is set by the state government, while the maximum coverage amount is set by the insurance company. Maximum coverage amounts are usually no more than $25,000. The cost of PIP coverage will also depend on the specific policy and the coverage limits chosen by the insured.

Bodily injury liability

In Pennsylvania, bodily injury liability coverage is a requirement for drivers. The minimum coverage is $15,000 per person and $30,000 per accident. This means that if you are at fault in a car accident and someone else is injured, your insurance will cover their medical expenses, lost wages, and even funeral costs up to these limits. Bodily injury liability insurance is designed to protect you from financial hardship if you are legally responsible for an accident that causes injury or death.

The coverage limits are typically split into two categories: a per-person limit and a per-accident limit. In the case of Pennsylvania, the per-person limit is $15,000, and the per-accident limit is $30,000. This means that the insurance will cover up to $15,000 in medical expenses, lost wages, and funeral costs for each injured person, and the total coverage for all injured persons in a single accident is $30,000.

It is worth noting that bodily injury liability insurance does not cover the medical costs of injuries that you may sustain in the accident. It is considered third-party insurance, as it only pays for damage to other drivers and passengers. To protect yourself financially in the event of your own injuries, you may want to consider additional coverage options, such as personal injury protection or medical payments coverage.

When determining how much bodily injury liability coverage you need, it is recommended to consider the value of your assets. If your insurance coverage is not enough to pay for the damages you cause, the injured party may take legal action against you, and your assets could be at risk. Increasing your coverage limits can provide you with greater financial protection in the event of an accident.

Property damage liability

In Pennsylvania, the minimum property damage liability coverage required is $5,000. However, this may not be enough to cover all property damage in the event of a major accident, especially if it involves a newer or luxury vehicle. The average cost of damage from a crash involving only property damage is $5,700 per vehicle.

When choosing how much property damage liability coverage you need, consider whether you own a home or other expensive items, if you travel in high-traffic areas, and if there are a lot of expensive vehicles in your area. You may want to increase your coverage limits or add an umbrella insurance policy for additional protection.

If the cost of damages exceeds your coverage limits, you will be responsible for the remaining cost. For example, if you have $20,000 in property damage coverage and cause $23,000 worth of damage in an accident, you would be responsible for paying the remaining $3,000 out of pocket.

Uninsured and underinsured motorist coverage

In Pennsylvania, the average monthly cost for a state minimum coverage auto insurance policy is $37, while a full coverage policy is around $107. The state's minimum car insurance requirements include $15,000 for bodily injury per person, $30,000 for bodily injury per accident, $5,000 for property damage, and $5,000 for medical payments.

Uninsured Motorist Coverage

Uninsured motorist coverage provides financial protection if you or your passengers are injured, or your vehicle is damaged, in an accident caused by a driver without auto insurance. This type of coverage is particularly important, given that nearly 13% of drivers countrywide don't have auto insurance, and the percentage can be higher in certain states. Without this coverage, you could be left paying for medical bills or vehicle repairs out of your own pocket. Uninsured motorist coverage typically includes:

• Uninsured Motorist Bodily Injury (UMBI): This coverage pays for medical bills for you and your passengers if you're hit by an uninsured driver.
• Uninsured Motorist Property Damage (UMPD): This coverage pays for repairs to your vehicle if it's damaged by an uninsured driver.

Underinsured Motorist Coverage

Underinsured motorist coverage is similar to uninsured coverage but applies when the at-fault driver doesn't have sufficient insurance to cover the injuries or damages they caused. This coverage ensures that your medical bills and vehicle repairs are taken care of, even if the other driver's insurance isn't enough. Underinsured motorist coverage typically includes:

• Underinsured Motorist Bodily Injury (UIMBI): This coverage pays for medical expenses for you and your passengers if the at-fault driver doesn't have enough insurance.
• Underinsured Motorist Property Damage (UIMPD): This coverage takes care of vehicle repairs if the other driver's insurance is insufficient.

Importance of Uninsured and Underinsured Motorist Coverage

While not mandatory in all states, uninsured and underinsured motorist coverage is highly recommended for all drivers. In Pennsylvania, you can choose to reject this coverage, but it's a wise decision to include it in your policy. It provides financial protection in case of an accident with an uninsured or underinsured driver, ensuring that you and your passengers receive the necessary medical care and your vehicle is repaired without incurring out-of-pocket expenses.

Frequently asked questions