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. 

The post Will This Raise My Insurance Rates? appeared first on J. Murphy Firm.

Immigrants and both documented and undocumented have the same right to pursue injury claims as legal citizens

Pursuant to the 14th Amendment to the United States Constitution, no State may deny “..any person within its jurisdiction the equal protection of the laws.” This means that legal immigrants and even people unlawfully present in the United States are entitled to pursue personal injury cases.

It may seem odd to allow people who have disrespected the legal system to use that same system to get money when they are injured. There have been arguments about who the 14th Amendment was really intended to protect, but the current reading extends 14^th Amendment protections to anyone in the United States.

Even if the 14^th Amendment didn’t exist, there are still sound reasons to allow any injured person to pursue a personal injury claim. For example, one large and important purpose of our injury law system it to punish and deter negligent or otherwise wrongful conduct. That legitimate purpose of any legal system, deterring conduct likely to injure others, exists whether or not the person who is injured has violated other laws.

We don’t for example, deny people the right to pursue a lawsuit if they are behind in their rent, have experimented with illegal drugs, or occasionally drive above the speed limit. Of course, illegal immigration is arguably a more serious offense than any of those, it is, in fact, a crime under current U.S. Law, but the reader might consider balancing the deterrence of injury causing behavior as a valid outcome.

Tricky Issue: Lost Wages

In many personal injury cases, the claimant will seek to recover for pain and suffering as well as for lost wages.  While the immigrant is free to recover for pain and suffering in just the same way as anyone else in the United States, claims for lost wages can be tricky. Particularly where the immigrant has no authorization to work in the United States, lost wages recovery may be limited to wages that would have or could have been earned in the immigrant’s home country.

Threats and Fear of Being Caught

When the immigrant is out of status or is undocumented, they may have a significant fear of arrest and/or deportation by the immigration authorities. The immigrant may fear being reported to the authorities in retaliation for pursuing a claim, or arrest “at the courthouse,” or any number of other possible scenarios. Here are a few points that may be of comfort for the injured immigrant:

1. Your own lawyer is ethically prohibited from reporting you to the authorities
2. A lawyer working for the other side in a case is ethically prohibited from threatening to report you to prevent you from asserting a claim
3. If the other side is not already aware of your immigration status, your lawyer can take steps to prevent the other side of the case from ever learning about it
4. Your immigration status is irrelevant to your case, it does not prove or disprove the other side’s fault or your damages. Because of this, most courts will grant motions to exclude discussion of your immigration status
5. You don’t have to have a social security number to pursue an injury claim
6. Over 90 percent of injury cases are settled without the parties ever having to enter a courthouse
7. If you request it, your lawyer can take steps to prevent the other side in a case from learning where you live

The post Personal Injury and the Undocumented Immigrant appeared first on J. Murphy Firm.

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.

The post Potentially Lethal Mistakes Motorcyclists Make appeared first on J. Murphy Firm.

The Story

According to KDKA, eighteen-year-old Taylor Wible, of the Hill District, was arrested late Thursday night. McCandless Police said he beat a woman who was getting into her parked car outside of the Longhorn Steakhouse at McCandless Crossing. Police also said they found brass knuckles, a pair of black gloves, and a cell phone on the suspect.

Duty of Care

Premises liability lawyers, or “slip and fall” lawyers, deal with the legal duties owed by owners and occupiers of land to people coming onto that land. In the language of premises liability lawyers, owners, and occupiers of land are called “possessors.” The people coming onto the land are generally referred to as “entrants.” Business visitors are one type of entrant and are owed the highest duty of care of any entrant upon the land. In the context of a shopping mall, the customers are business visitors.

The duty owed to the business visitor is, “To inspect, repair, and make safe the premises from all known or knowable risks of harm to the business visitor.” The business visitor is owed this because they are presumably spending money.

Breach of Duty

The duty has not breached the instant a dangerous condition comes into existence. It is breached when the possessor knows of the condition and fails to take reasonable steps to protect invitees. It is also when the possessor fails to take reasonable steps to inspect the premises for the occurrence or development of dangerous conditions.

Of course, dangerous conditions can range from a puddle of water on the floor all the way up to the premises being infested with Legionnaires’ disease, biting rats, or parasitic insects. These are all the sorts of things that the possessor must make the premises safe against on behalf of business visitors.

Third parties that are neither the entrant nor the possessor can themselves be dangerous conditions. This is particularly when the possessor knows that the third party is on, or is coming on, the premises for the purpose of exacting nefarious intentions upon legitimate business visitors.

This particular case did not happen inside a business, but rather in the parking lot of one – the parking lot of the McCandless Crossing Shopping Center. The question becomes: “Did McCandless Crossing know, or should it have known that this person was on the premises, allegedly carrying an illegal weapon and intending to harm people?” The answer to that question will turn on multiple factors. Whether there was security for McCandless Crossing and whether that security was adequate for the job. Whether McCandless Crossing was aware of previous similar crimes on their property. And whether or not those crimes were reported to police.

Actual Notice

McCandless Crossing is now on actual notice that third parties are coming onto its premises to commit crimes against people in its parking lot(s). They may escape liability for Wible’s alleged crime but they may not be so lucky next time. I do hope that McCandless Crossing takes notice of, and action in regard to, this very serious threat. And the action must come sooner rather than later because neither the courts nor potential shoppers will have mercy on them if they do not.

If you’ve been the victim of a crime like this, please contact my team and I and we will help you as soon as possible.

The post Outrage in the North Hills appeared first on J. Murphy Firm.

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.

The post Representing the Survivors: Wrongful Death Actions 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.

The post Nuances of Personal Injury: Understanding Reserves appeared first on J. Murphy Firm.

Pursuant to DEA Regulations, cannabis is a Schedule I Drug. Under 75 Pa. C.S. §3802(d)(iii) someone who drives with any amount of the metabolites (the chemical byproducts left in your system as the drug breaks down) of any Schedule I Drug in their system is guilty of violating the Pennsylvania DUI law.

There is no exception in the DUI law for medical cannabis cardholders. See my earlier article on the perverse evolution of DUI Law.

According to the U.S. National Library of Medicine, the metabolites of cannabis are detectable in the user’s system for up to thirty days after they stop using the drug. Because of this, if you are a medical cannabis user, you risk a DUI every time you get behind the wheel.

Until the DUI law changes, the only way you can be legal enough to drive is to discontinue the use of cannabis for thirty days. In the meantime, while we are waiting for the law to change to accommodate lawful users of cannabis-based medicines, if you get pulled over, follow my previous advice on what to do when you are stopped for DUI.

Already have a DUI case? Explore Joe’s Practice Areas for more information on how we can help you settle your case.

The post DUI for Medical Marijuana? Believe it. appeared first on J. Murphy Firm.

A driver who chooses limited tort is limited in their right to sue for injuries sustained in a car accident and can only sue if they have sustained what the law calls “Serious injury.” Serious Injury is defined in the Motor Vehicle Code as: ”[A] personal injury resulting in death, serious impairment of body function or permanent serious disfigurement.” A driver who chooses full tort can sue for any injury at all and is not limited.

Perversely, limited tort policies are more common in congested metropolitan areas where accidents themselves are more common. According to this study, 60 percent of the policies issued in the metropolitan areas of Pennsylvania are limited tort policies.

As a practical matter, insurance companies will refuse to settle with someone who has chosen limited tort unless they have very serious injuries. Even worse, many lawyers won’t accept people with limited tort as clients because the risk of recovering nothing (which is a financial loss to the law firm) is higher than with full tort clients. Representing a limited tort client with injuries that may or may not legally qualify as “serious injuries” also means that the lawyer will have to win two cases: one getting the client over the limited tort threshold and the other winning the case.

It’s tough when someone comes to me in pain and angry saying they want to sue the so-and-so who hit them and I have to tell them that I can’t help because of a choice that they made when buying insurance several years ago.  

Some don’t believe me or turn their anger on me. Some even think I’m secretly lying to them on behalf of insurance companies. I hate telling hurt people that I can’t help them, and over the years I have developed some tips and tricks to get around the fact that an injured party has chosen limited tort.

1. “Full Coverage” does not mean “Full Tort.” A lot of times I ask a potential client if they have full tort and they knowingly look me in the eye and insist that they have “full coverage.” This is, in many ways, a worse situation than the client who doesn’t even know what his or her tort option is, as this client believes that they have everything and can’t have possibly made a bad choice or missed anything. Let me make this clear: full coverage means full coverage against people suing you, not the other way around.
2. Check your tort option on the declarations page of your policy. At least once a year your auto insurer will mail you a copy of your auto insurance policy and new insurance cards. The tort option in effect on your policy will be in the declarations section of the actual policy and not on the insurance card. If you don’t have or don’t know what the actual policy is, call or write to whoever sold you the policy and ask for a reprint of the policy with declarations. The actual policy has a section entitled declarations which sets forth things like how much insurance you have, how much medical benefit, whether you have lost wages coverage, etc. and there will be a line in there which says full tort option or limited tort option.
3. If you have limited tort, you have to sign a new form to get out of it going forward. A call to your agent is not enough, pursuant to 75 Pa. C.S. §1705(b)(1), all renewals of a policy will have the same tort option unless a new tort option election form is filled out.

If It is too late and you have been in an accident, but have elected limited tort on your own insurance:

1. Do you have serious injuries? It is possible that you have injuries that are serious enough that you can sue, even though you elected limited tort. Additionally, various cases have found exceptions on a case-by-case basis where broken bones, herniated discs, and even minor scars on one’s body were held to be enough to allow recovery, even though the injured party had elected limited tort.
2. The statutory exceptions. There are six fact patterns set forth at 75 Pa. C.S. §1705(d)(1) and (d)(2) in which the legislature has specifically indicated that you can proceed as a full tort claimant, even though you elected limited tort:
   • If you are injured by an impaired driver who is later convicted of DUI or charged with DUI and accepts ARD, or;
   • If you are injured by a driver who Is operating a vehicle that is registered in another state, or;
   • If you are injured by a driver who intended to harm himself or someone else, or;
   • If you are injured by a driver who is driving without insurance, or;
   • If you are injured and that injury was caused by a defect in the vehicle or defect in repairs to the vehicle, or;
   • If you are injured while you were an occupant of a motor vehicle other than a private passenger motor vehicle, for example, while riding in a taxicab.
3. The case law exception. Consistent with L.S. ex. rel. V. Eschbach 583 Pa.. 47, 874 A.2d 1150 (2005), if you are hit by a car while walking or while riding a bicycle you can sue as if you chose the full tort option.
4. The paperwork. In Eschbach, the court noted a legislative preference for a finding of full tort where there is some confusion or lack of clarity as to what the driver elected. In 75 Pa. C.S. §1705(a)(1), the legislature set forth the specific language that must be used in the tort option election form. Accordingly, where the driver never signed the form or the insurance company can not produce a copy of the signed form, the full tort option would apply. Similarly, where the language n the form that the driver signed deviates from the language mandated by Section 1705 the election would be defective, again with the effect that the driver would be treated as a full tort claimant.

Conclusion:

When presented with an injured client that believes they elected limited tort rights, counsel should make a careful investigation into the injury-causing accident to see if any exceptions apply. If no exceptions apply, counsel should contact the clients own auto insurer an obtain a copy of the signed election form to ensure that the client did, in fact, execute a properly worded tort option election form.

Have a tort case you want to fight? Any other personal injury woes? Check out Joe’s Practice Areas for more information on how we can help you and your case!

The post Getting People out of Limited Tort appeared first on J. Murphy Firm.

A driver who chooses the Limited Tort option signs away their right to sue for injuries sustained in a car crash unless those injuries are “serious injuries” as defined in 75 PA. C.S. 1702: “A personal injury resulting in death, serious impairment of body function or permanent serious disfigurement.”  

Drivers who elect the Full Tort option retain the right to sue for all injuries, even ones that don’t rise to the level of death, disfigurement, or serious impairment.

For the insurance companies, this means that there are two classes of drivers out there, people who have full rights to sue them and people who have limited rights to sue them. Of course the insurance companies would love it if everyone had limited rights to sue, and in fact that they reward drivers who choose limited tort with an average 15.3 percent lower premium than a similar full tort policy.

But is that a good deal for you, the driver? You are saving some money, but you are signing away some rights. What are those rights? What are they worth?

First, let us speak about what you “get” for choosing limited tort coverage.

Depending on who you ask, the average annual cost of auto insurance in Pennsylvania is between $878 and $1433. Using the 15.3% reduction in premium figure I cited above, this translates into an annual savings of $132-$215.

What do you give up to get that money?

In layman’s terms, you are giving up your right to sue for “whiplash” type injuries. In my experience, these whiplash type cases commonly settle in the $5,000 to $7,000 range. Assuming attorneys’ fees on the high end, that would be $3,000 to $4,200 to the driver/client.

The Cost-Benefit Analysis

 If you divide the high estimate of annual savings ($215) into the low-end value of the right to sue that you sign away by taking limited tort ($3,000) you would have to go 14 years without being hit by someone for the insurance savings to even equal the right to sue you signed away by taking limited tort.  

Verdict:  Limited Tort policies are not a fair deal, you are giving away more value (in terms of rights to sue) than you are getting back in terms of lower premiums.

Want to know how long you have to sue after an accident? Check out this blog on the Tort Statutes of Limitations in Pennsylvania.

The post Signing Away Your Rights: The Limited Tort Scam appeared first on J. Murphy Firm.

“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.

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