Auto accidents can and will happen.  Even the most attentive driver can make a mistake, be distracted, or misjudge distances.  Because of the inevitable nature of auto accidents, the law requires that every driver have:

“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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