Here in Pennsylvania, the main thing that will cause your rates to go up is driving dangerously and exposing the insurer to greater than average risk. Dangerous, reckless, or inattentive drivers represent a greater than average risk of the insurance company having to make payouts. The insurer, upon discovering that an individual insured driver represents a greater than average risk of payouts will increase the premiums charged to offset the risk.

The two main ways that your insurance company finds out about dangerous driving habits are your driving record (tickets/”points”) and if you have been at fault in causing an accident[1]. This blog is about what sort of claims you might make against your own insurance and if making any of these claims should raise your auto insurance rate.

Damage to Your Own Car

Unless you have “liability only” coverage, your insurance policy covers you for the costs of damage to your car. Unless you are at fault in causing the damage, presenting a claim for damage to your car should not raise your rates. The insurance company is well aware of the normal risks in the world of other drivers, trees falling on cars, damaging hailstorms, and the like.

The exception here is damage that you cause through your own fault. For example, if you were to drive your car into a telephone pole, that would indicate unsafe driving habits and a larger than average risk of future claims. The insurer would adjust your premiums accordingly.

Medical Bills

Every auto insurance policy sold in Pennsylvania has a minimum of $5,000 in medical benefit attached to it. The idea here is that if you are injured in an auto accident that there ought to be some assurance to first responders and that there will be some money available. Any medical treatment given for injuries sustained in an auto accident must be billed against this $5,000 first. 

Even if you have private health insurance, a healthcare provider providing medical services for injuries sustained in an auto accident is required to bill against that $5,000 on your auto policy until it is exhausted.

Just as is the case with damage to your car, unless you yourself caused the auto accident giving rise to the claim for medical benefits, making a claim for medical treatment under your auto policy will not increase your premiums.

Why do I have to submit a claim to my own insurance if someone else is at fault?

People who have been in an auto accident are commonly told to submit medical, auto repair, rental, lost wages, and other claims to their own insurance company. For most drivers, this is confusing, nerve-wracking, and even perceived as irresponsible or dismissive advice.

In reality, it is probably good advice as it will get the driver’s immediate needs for transportation, medical treatment, etc. handled faster. In practice, when you submit a claim to your own insurance for damages you suffered at someone else’s hands, they will pay the claim subject to the limits of the coverage involved and adjusting. Then, they will go after the other driver’s insurance to be paid back. This is a process called intercompany arbitration and it is automatic and handled internally by agreement of the insurance companies. 

If you submit a claim to your own insurance for medical damage, or damage done to your car, caused by someone else’s fault it will not raise your rates. You specifically bought insurance in case someone else caused these types of harm to you and the insurance company willingly sold those insurance benefits to you. 

When the other party has insurance, your insurer will get their money back through intercompany arbitration anyway.

The Exception to all of this: Bodily Injury Claims

The one common exception to the foregoing is Bodily Injury claims (“BI Claims”). 

BI claims are commonly referred to as personal injury claims. These have to be submitted directly to the at-fault driver’s insurance by the injured party. This is usually done by hiring a personal injury attorney to present those claims in a way that maximizes value. 

When the at-fault driver has no insurance or not enough insurance to fully compensate the injured driver, the injured driver may then turn back to their own insurance and present an uninsured or underinsured driver claim. 

You can read my piece about the menace of uninsured drivers here. Another interesting read on personal injury claims would be my blog on the limited tort scam.

Even if you are at fault, don’t hesitate to submit claims

Premiums rise with risk. Fault tends to indicate risky or inattentive driving behavior. When an insurer becomes aware of this it will adjust premiums upward to reflect that additional risk.

Where a driver is at fault in an accident claims are going to be made against his policy by the other side via intercompany arbitration and or via the presentation of a personal injury claim. The at-fault driver’s premiums are going to be adjusted upward, so it makes no sense to not take advantage of the coverage you have, even if you are at fault.

If you or someone you love has been injured and wants to pursue a personal injury claim, please contact my office or me, directly. 

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[1] In a somewhat Orwellian twist, there are some insurance companies that offer a significant discount to drivers whom allow the insurance company to install tracking equipment in their car, so long as that tracking reveals careful driving. 

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The vast majority of motorcycle crash cases are the result of another driver, usually operating a normal passenger vehicle, not seeing the motorcyclist or not judging the motorcyclists’ speed and position properly. Approximately two-thirds of motorcycle crashes where another vehicle is involved are caused by the other driver violating the cyclists’ right of way.

As a legal matter, most of the mistakes I am going to list are actually the other driver’s fault. Unfortunately, the laws of the road and the laws of physics aren’t always the same. As a motorcyclist, you will have to assume that you are invisible to other drivers.

Car Door

This is a pretty common scenario. A motorcyclist is driving in between two lanes of cars and a driver opens his car door right in front of the motorcyclist. Just because you will fit doesn’t mean you should try. Don’t give in to the temptation of squeezing past traffic and stay out of the deadly area between lanes of traffic or between traffic and parked cars.

Left Turn

Another common type of motorcycle accident is where another driver makes a left turn right in front of the oncoming motorcyclist. The average driver is looking out for other cars, and may not see, notice, or grasp the speed of an oncoming motorcycle. Drive defensively and watch out for drivers who might turn left in front of you. It is a good idea for all motorcyclists to get in the mindset that other drivers are simply less likely to see them, and consider that in all situations.

Sharp Corner

This is more common with newer motorcyclists. Not all curves in the road have a constant radius and the speed you enter a curve may not be appropriate throughout the entire curve. Unless you can see the entire curve or are already familiar with it, be careful with your speed and err on the side of caution.

Alcohol

Operating a motorcycle presents challenges and risks far in excess of those involved in operating a normal car or truck. If it is a bad idea to drive a car under the influence of alcohol or drugs, it is more than doubly so with a motorcycle. Never, ever, operate a motorcycle when under the influence.

Gravel

This is a variation on the sharp corner problem. Here you are negotiating a curve, or hill, or trying to stop and there is gravel or loose dirt, or even spilled oil on the roadway. These are possibly hundreds of times more dangerous on a motorcycle. Keep your eyes out for these potential death traps and avoid them at all costs. Never trust that road ahead which you can’t see will be clear of these wipe out hazards.

Rain

In his hit, “You May Be Right,” rock star Billy Joel sang about how driving your motorcycle home in the rain proves that you are insane. The good news is that motorcycle and tire technology have both come a long way since that song was released in 1980. While it won’t be pleasant, riding a motorcycle in the rain is a lot safer today. Remember that metal surfaces like streetcar tracks will be extra slippery and take your time.

Lane Changes

This is another nightmare scenario caused by auto drivers not seeing motorcycles. You should anticipate that auto drivers are unlikely to see you and may change lanes in front of you, or even potentially drive into you. Whatever you do, don’t make a crash like this more likely by lingering in the blind spots of cars, vans, and trucks.

We do hope that you enjoy the spring biking season. Please be careful and anticipate that you will be invisible to other drivers. Happy trails!

If you or a loved one has suffered from a personal injury due to a motorcycle accident, contact us.

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What is Wrongful Death?

People die every day, usually because of natural causes. When someone’s life is cut short due to the negligence of someone else, that is called a wrongful death action. We handle wrongful death actions in Pittsburgh and all over Pennsylvania.

When we put on a wrongful death action, it involves two separate types of claims on behalf of the survivors of the person who was killed. One type of claim is called a Death Action, and the other type of claim is called a Survival Action.

What is the difference between a Death Action and a Survival Action?

There are important differences between a death action and a survival action. Those differences have drastic effects on who can bring the case or share in the proceeds of the case. Additionally, how the proceeds of the case can be divided and minimizing the tax liability of those sharing in the proceeds.

Death Actions in Pennsylvania

As noted above, a wrongful death action involves a death action and a survival action. The death action in wrongful death case involves the survivors of the deceased making a claim for the loss of their loved one. People have a right to the love, support, companionship, guidance, and advice of their loved ones. When that loved one is killed by negligence or wrongful conduct, the survivors have a right to sue for what they have lost.

Because it represents the survivors suing for their own loss, the wrongful death claim is owned by the survivors. The basis of the wrongful death action is that the survivors are recovering for a loss. Meaning, payment of a wrongful death settlement or verdict to the survivors of the decedent is generally tax-free.

Survival Actions in Pennsylvania

The survival action in a wrongful death action involves claims for pain and suffering that the deceased went through before they died. If the deceased had lived, they would have been able to sue on their own for these damages. That right to sue for these damages survive the death of the deceased. That is why this action is called a survival action, it is the survival of claims the deceased had at their death.

The survival action is a claim for losses suffered by the deceased themselves. Because of this, the survival claim is the property of the estate of the deceased. Therefore it is subject to estate tax, if large enough.

Lost Wages

A lost wages claim is a claim for wages the deceased would have earned, had they survived. Such a claim for lost wages is normally a part of a survival action. If the deceased had actually earned the money being recovered in the lost wages claim, they would have had to pay income tax on those earnings. As a result, any part of the case that is a lost wage claim is subject to federal income taxes on wages.

Follow us on Facebook or jmurphyfirm.com for Part 2 of this blog. In the second part, I will discuss how we protect our clients from paying more than their fair share of taxes due on a wrongful death settlement.

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Commercial Vehicle Accidents are among the most costly. Commercial Vehicle Accidents involve heavier vehicles which sometimes carry dangerous cargo and are among the highest of all auto accident settlements. Because of this, commercial drivers are trained to a higher standard than your everyday drivers. In fact, a commercial driver’s license, or CDL, is an entirely separate license required to drive commercial vehicles.

One of the techniques that commercial drivers are trained to use is the “Smith System.” The Smith System is five simple rules which, if followed, can drastically cut the likelihood of being in an accident.

The Smith System owes its name to Harold Smith, who was a World War II veteran that had served as a landing craft operator. After the war, Smith saw a billboard urging drivers to be safe and pointing out the number of fatalities that occur because of auto accidents.

He noticed that there were more people being killed in auto accidents than there were killed in the war. This motivated him to invent, publicize and promote what is now known as…

THE SMITH SYSTEM

1. Aim High

The first rule for this method is “Aim high in steering.” Staying alert of the dangers and traffic ahead not only avoids rear-end collisions but also can alert other drivers behind your vehicle to slow down. The driver should steer and focus their attention high, so as to view the road as a whole and not just the next few feet ahead.

2. The Big Picture

“Be aware of your surroundings at all times” may seem obvious to say, but distracted drivers are just as dangerous as intoxicated ones. Erratic and angry drivers take up a large portion of the traffic we see daily, so avoid major accidents by noticing how other drivers behave on the road. Having the whole picture means that you are doing your part to keep your vehicle as safe as possible while moving 100 ft a second. There are a variety of hazards between your own vehicle and other drivers, and a keen awareness of these dangers will reduce these risks.

3. Keep Your Eyes Moving

The third standard of the Smith System asks drivers to remain alert. Energy drinks can only do so much before they cause the body to crash, and any repetitive motion sends us into a trance. Consistent eye movement prevents your body from entering the trance state, keeping you alert to every driving condition ahead of you.

4. Leave Yourself an Out

The fourth principle of the Smith System states to leave yourself a way out. This means to ensure that other drivers do not box you in while selecting their lanes. Do not follow other vehicles too closely, and always anticipate what choices other drivers make.

5. Make Sure They See You

The worst thing a driver can do is assume. Assume other drivers can see them, assume other drivers are not dangerous or even assume that they will just get to their destination safely. The final rule for the Smith System is to “Make Sure You Are Seen”. This rule prevents accidents by removing assumptions made behind the wheel. As a driver, make sure that other drivers can see you and anticipate your movements. If you feel you are coming into another driver’s blind spot, use the horn to get their attention.

The post Drive Like a “Pro” – Tricks Commercial Drivers Use To Reduce Accident Risk appeared first on J. Murphy Firm.

Insurance companies are required to do this so that there is enough money set aside in reserve to settle all reported but not settled (“RBNS”) claims in the event that the insurance company goes bankrupt.

There is a tremendous business tension in placing money in reserve. Money placed in reserve cannot be used to expand the insurance company or make investments. Money held in reserve is far less profitable than money the insurance company can use as it wishes. It is in the best interest of the insurance company to get as much money out of reserve as fast as possible so that it can be used to further the company’s business interests.

At the same time, people who bought insurance selected limits and paid for those. They are entitled to have claims against them paid by the insurer up to those limits and are personally liable if the insurer cannot pay claims. Injured people are certainly interested in knowing that the insurer of someone who injured them isn’t able to gamble with money that they may ultimately be entitled to. The public also has an interest in reserves being properly set so that the costs of claims aren’t passed on to society at large.

This tension between the business interests of the insurance company and the interests of people who bought insurance, people who got hurt, and the general public is managed by the various state insurance commissions which set rules and regulations concerning, among other things, claim settlement practices including policies on how reserves must be set, when money can be released from reserve, and the like.

Understanding and estimating reserves is a very important part of what any personal injury firm has to do to represent the interests of its clients.

Let’s take the typical example of an auto accident where the at-fault driver has bodily injury liability limits of $50,000. There has been an accident, and the at-fault driver promptly notifies his insurer of the accident. The insurance company is glad to have prompt notice so that it can promptly set a reserve for the case, and that is why they strongly encourage drivers to report accidents right away.

When the at-fault driver notifies the insurer of the accident, the agent will set an initial reserve. If the driver has no information, that reserve will be set at the policy limits. On the other hand, if the driver can confirm that all parties drove away on their own, or that no ambulances were called to the scene, etc. the initial reserve might be set lower.

Over the course of the claim, the insurance company may lower reserves a few times, or not at all, depending on the information it receives. For example, if the injured party is treating only with a chiropractor and has limited tort insurance, reserves may be set low indeed as treating only with a chiropractor indicates whiplash types injuries and limited tort claimants are generally barred from pursuing claims for whiplash type injuries.

Insurance companies almost never settle for an amount in excess of the reserve. If they do, they are admitting that they didn’t have enough in reserve and that they have violated their duties to set proper reserves for all claims. If you want more than the amount in reserve, you will almost certainly have to go through the risk and expense of a trial. If you obtain more than the amount in reserve at trial, the insurer can point to the unpredictable nature of jury verdicts as the reason you get more than the reserve amount, instead of having to make a tacit admission that it violated its duties to set a proper reserve.

Good personal injury lawyers know all of this. The actual reserve amount on any given case is usually kept secret, but smart lawyers know that it exists and they avoid doing things and giving information that would allow the insurance company the excuse it wants to lower reserves and return that money to its general fund.

Smart personal injury lawyers are careful about the information that they provide to the insurer leading up to and during settlement talks because they want the maximum amount of money available for the settlement of their client’s claim. This is not because smart personal injury lawyers fear court, but rather, it’s their duty to get their client the maximum amount of money possible with the minimum amount of risk.

I have often wondered about people who try to settle their own cases. I know they are getting less than they should, and I wonder if reserves are set lower the instant that the insurance company understands that there is no lawyer involved – they shouldn’t be, but they probably are.

I wonder how many mistakes the person representing themselves makes along the way. Do they discuss prior injuries right away?  Do they disclose that they drove their self to the hospital? Do they let the adjuster trick them into saying things like “I wasn’t hurt so bad?” Each of these and a hundred other mistakes will allow the insurer to lower the reserve, making the final offer much lower with no room to negotiate upward.

And what does the person who is representing his or herself do when presented with this lowball offer after the insurance company had used every possible way to get the reserves down as low as possible? They take it quietly. Sometimes they brag about representing themselves, but they never get full value, and there is nothing they can do about it – because they aren’t lawyers, don’t understand reserves and policies in setting reserves, and, because they are not lawyers, if they don’t like it they have no ability to sue.

An understanding of reserves and reserve policies is just one of possibly a hundred factors that go into what I believe are personal injury representation best practices.  

They say a man who represents himself in court has a fool for a client. If you are trying to settle a case for yourself with no understanding of nuances like setting reserves, it is proof that you can have a fool for a client without ever even going to court.

If you want to learn more about your personal injury case involving an auto accident or of our other practice areas, please check out our page to find out how we can assist you.

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“The ability to respond in damages for liability on account of accidents arising out of the maintenance or use of a motor vehicle in the amount of $15,000 because of injury to one person in any one accident, in the amount of $30,000 because of injury to two or more persons in any one accident and in the amount of $5,000 because of damage to property of others in any one accident.” 75 Pa. C.S. §1702.

This ability to pay damages must be demonstrated, “…in a form acceptable to the [Pennsylvania] Department of Transportation.” (Id.). In most cases, this means that in order to legally operate a motor vehicle in Pennsylvania, the driver must be covered by an insurance policy providing a minimum of $15,000 per person and $30,000 per accident coverage against liability claims brought by people injured by that driver’s operation of a motor vehicle.

By adopting these minimum insurance requirements and penalties for operating a vehicle without insurance, the legislature was balancing the needs of citizens (and the economy) to have people driving against the interest of potentially injured parties in being fully compensated.  It was thought that requiring higher liability minimums would result in fewer people driving and or more people driving with no insurance at all and that this would negatively affect the overall economy of Pennsylvania.

If a driver operates a motor vehicle without insurance, he or she will be subject to:

A $300 fine (75 Pa. C.S. §1786(f));

A three-month driver’s license suspension (75 Pa. C.S. 1786(d));

A three-month suspension of the registration of the vehicle, which means no one can legally drive it (75 Pa. C.S. 1786(d)).

Of course, an automobile accident can easily cause a bodily injury or even a death that cannot be fully compensated by the payment of $15,000, assuming that the at-fault driver is insured at all.  Simply put: the minimum coverage to be legally allowed in Pennsylvania is insufficient to fully compensate people for any but the most “garden variety” of injuries arising out of an auto accident.

Pennsylvania drivers can buy optional insurance with their car insurance policy called UM/UIM Coverage.  UM/UIM coverage is insurance that pays a driver who is injured by another driver who does not have enough insurance to fully compensate them (an “underinsured motorist”) or has no insurance at all (an “uninsured motorist”).  

As a default rule every auto insurance policy issued in Pennsylvania must be offered with underinsured motorist coverage (“UIM” Coverage) and uninsured motorist coverage (“UM Coverage”) in an amount equal to the liability limit of the same policy (75 Pa. C.S. 1731(a)).

However, the policyholder may reject those limits and elect coverage in an amount less than the liability limit or even zero (75 Pa. C.S. §1734).  When the policyholder elects lower UM/UIM limits or rejects UM/UIM coverage, his or her insurance policy will be less expensive.

Election of UM/UIM limits lower than the liability limits of an insurance policy, or outright rejection of UI/UIM coverage, must be done in writing and on a form using language mandated by PennDOT.  

Pennsylvania Law requires strict compliance with the language that must be on the UM/UIM rejection form. Where the form deviates from the mandatory language, the election of lower UM/UIM limits or even outright rejection of UM/UIM coverage will be held invalid. This will result in a windfall to the insured, who will have UM/UIM coverage in the same amount of their liability coverage that they did not pay for. Rarick v. Federated Service Insurance Company, (2018)

The same result would follow if the form follows the proper language but was never executed by the policyholder, or where the policyholder executed a properly worded form but the insurer cannot provide a copy to prove that the insured elected lower limits or rejected UM/UIM coverage.

UM and UIM protection extends to the policyholder and relatives who live with the policyholder. Because of this situation where relatives living together have multiple auto insurance policies that have UM/UIM coverage, that coverage is said to be “stacked” and any relative living in the house can collect under all UM/UIM policies in the house.  

“Stacking” can be waived in much of the same way as the UM/UIM coverage be rejected, but that has to be on a form which strictly complies with statutory requirements.  Where the form complies with the statutorily required language but is not executed by the policyholder, or where the policyholder executed a properly worded rejection of stacking form but the insurer cannot produce a copy to prove the rejection of stacking the policy would be stacked nonetheless.

There are roughly nine million licensed drivers in Pennsylvania. Seven percent of those drivers, or approximately 684,000 people, have no insurance at all.  People who are uninsurable, cannot afford insurance, or who can only afford minimum coverage are particularly unlikely to have any assets that can be taken to satisfy a court award of damages.  If you are injured by someone with little or no insurance, or someone who simply does not have enough coverage to properly compensate you, having that UM/UIM coverage will make a world of difference.

For all of the above reasons I advise everyone:

• Do not reject UM/UIM Coverage or Lower the coverage
• Make sure all UM/UIM coverage is “Stacked”

It will make a world of difference in what I can do for you if you are hurt by someone with little or no insurance.

Check out our practice areas here.

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