Navigating Pennsylvania Auto Insurance Laws and Requirements

Insurance laws & requirements in Pennsylvania

Are you in compliance with Pennsylvania car insurance laws?

Pennsylvania is unusual in that it has both a no-fault and fault-based insurance system. Find out what this means for you and your injury claim.

A car accident can be devastating. The main purpose of car insurance is to limit the devastation by protecting both the at-fault party and the injured party against financial loss.

All states have car insurance laws that address everything from minimum insurance coverage requirements to what happens when you’re in an accident with an uninsured driver. Pennsylvania, however, has some truly unique insurance laws.

Let’s take a closer look.

Is Pennsylvania a no-fault or fault-based state?

No-fault and fault-based insurance systems refer to a state’s rules for how a car accident victim is required to handle the claims-filing process.

  • No-fault insurance systems. In states with a no-fault insurance system, all drivers in an accident—no matter who’s responsible—turn to their own insurance policies to cover the damages.
  • Fault-based insurance systems. In states with a fault-based insurance system, the person responsible for causing a car accident is responsible for paying the damages.

Pennsylvania is unique because it doesn’t have a no-fault or fault-based system.

Rather, it’s up to each driver to decide whether to purchase no-fault insurance (sometimes called “limited tort” insurance coverage) or fault-based insurance (sometimes called “full tort” insurance coverage).

Should I purchase no-fault insurance or fault-based insurance coverage?

It’s a good idea to talk to your insurance agent about the pros and cons of each type of insurance. Keep the following considerations in mind.

If you have no-fault insurance and you’re injured in a car accident, you’ll file a claim with your own insurance provider. You won’t have to determine who’s at fault or prove negligence in order to obtain immediate financial recovery. On the downside, you won’t (except in rare circumstances) be able to recover damages for emotional distress or pain and suffering.

With fault-based insurance, your rights are unrestricted. In other words, you’ll be able to attempt to recover all of your damages from the at-fault driver — including pain and suffering. On the downside, fault-based insurance policies are generally more expensive than no-fault insurance policies and you may have to wait longer to receive your compensation.

Mandatory auto liability insurance

All drivers in Pennsylvania are required to carry liability insurance. Liability insurance covers bodily injuries and property damage caused by the insured individual and sustained by someone other than the insured.

The required minimum amounts of liability coverage in Pennsylvania are:

  • $15,000 for the bodily injury or death of one person in an accident
  • $30,000 for total bodily injury or death in an accident (i.e., for all persons harmed in one accident)
  • $5,000 for property damage per accident 

The amounts listed above are the minimum requirements. You always have the option to purchase more coverage. You are personally liable for the damages incurred above these policy limits. So, the more coverage you have, the less likely it is that you’ll be forced to pay for someone else’s damages out of your own pocket.

Facing factsPennsylvania isn’t the cheapest place to purchase car insurance, but it’s also not the most expensive. According to the Insurance Information Institute, Pennsylvania is, on average, the 18th most expensive state for car insurance.

Penalties for being uninsured in PA

Driving without car insurance can mean financial ruin if you cause a serious car accident. In addition to any personal injury lawsuits you may face, there are other criminal penalties:

  • A minimum fine of $300
  • A 3-month suspension of your vehicle registration
  • A 3-month suspension of your driver’s license
  • A restoration fee to restore your vehicle registration
  • A restoration fee to restore your driver’s license
  • A restoration fee to restore your commercial driver’s license
  • The vehicle may not be driven by anyone while the registration is suspended

What happens if the other driver doesn’t have liability insurance?

Even though liability insurance is mandatory in Pennsylvania, not every driver follows the law.

So what happens if you’re involved in an accident and the other driver doesn’t have insurance?

Insurance companies in Pennsylvania are required to provide you with the option of purchasing uninsured motorist (UM) coverage and underinsured motorist (UIM) coverage with your car insurance policy.

Let’s look at these options more closely:

  • Uninsured motorist (UM) coverage provides coverage for bodily injury and property damage sustained by you or the passengers in your vehicle as a result of an accident involving an uninsured driver.
  • Underinsured motorist (UIM) coverage provides coverage for bodily injury and property damage sustained by you or the passengers in your vehicle as a result of an accident involving a driver who has insufficient insurance to cover the full amount of damages.

Optional car insurance coverage

In addition to UM and UIM coverage, there are other types of optional insurance coverage you might want to consider adding onto your auto policy for added protection:

  • Funeral benefits coverage. This coverage pays a certain amount for funeral expenses if you or a family member dies as a result of a car accident, regardless of fault.
  • Income loss. This coverage pays a portion of any lost wages due to a car accident.
  • Comprehensive coverage. This coverage pays for theft or damage to your car from hazards like fire, flood, and vandalism.
  • Extraordinary medical benefits. This coverage pays for medical expenses that exceed$100,000 (up to a maximum of $1.1 million).
  • GAP coverage. This coverage pays the difference between an insurance company’s payment for a totaled vehicle and the balance of a vehicle loan.

If you’re financing the purchase of a car, some banks may require you to purchase certain optional insurance coverage. Be sure to read your financing agreement carefully.

Pennsylvania car insurance FAQs

Still have a question regarding car insurance in Pennsylvania? Let’s take a look at some common questions.

How are my car insurance rates determined?

Car insurance companies consider several factors when determining how much your policy will cost, including:

  • The make and model of your car
  • The age of your car
  • The safety features that are installed in your car
  • How many miles you plan to drive the car per year
  • Your driving history
  • Your age

Many states offer discounts for things like taking driver safety courses and getting good grades.

What happens if an object inside my car is damaged?

Personal effects that aren’t permanently installed in your vehicle by the manufacturer are generally not covered by your car insurance policy unless specifically declared and added to the policy.

If you have something expensive that you want insured (such as a custom stereo system or laptop computer), talk to your insurance agent about having it explicitly added to your policy.

What if nobody will sell me insurance because of my poor driving history?

Pennsylvania’s Assigned Risk Plan is a program that offers car insurance to those who are unable to get coverage on their own. Every insurance company in Pennsylvania is required to participate in the plan.

To learn more about the Assigned Risk Plan you can visit the AIPSO website.

What if I drive for Uber or some other ride-share service?

Most personal car insurance policies do not provide coverage while you’re carrying a passenger for hire. However, some insurers offer to endorse coverage onto your policy—usually for an additional fee.

In addition, some rideshare companies offer insurance coverage.

My automobile policy was canceled because I didn’t pay my premium on time. Is this legal?

Yes. If your insurance company doesn’t receive your premium payment by the due date, the company can cancel your policy. Unlike some states, Pennsylvania doesn’t require companies to extend a grace period for premium payments.

Is it legal for my insurance company to non-renew my auto insurance because I have too many claims?

An insurance company may non-renew a policy if you’ve had 2 or more accidents of certain types within 36 months, so long as the amount paid in claims for both accidents exceeds the current threshold amount after you pay any applicable deductible.

Still have questions about car insurance in Pennsylvania? Consider using the Enjuris Lawyer Directory to contact an attorney in your area.

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