Pennsylvania Car insurance laws and requirements help keep drivers, passengers and pedestrians safe by requiring adequate financial responsibility and a clear understanding of any relevant legislation. We help you stay updated on the most important aspects of liability coverage, remain legal, and show you how to find an affordable policy. If any Keystone State laws are changed or updated, we will review and explain the impact it may have on driving.
Maintaining car insurance in the Commonwealth is mandatory. It is compulsory from PennDOT (Pa Department of Transportation) that you meet financial responsibility requirements, or you risk losing your driving privileges. We later discuss the specific details, and make recommendations that simplify the process of maintaining or reinstating your license. If your current premium is not received by the carrier on the due date, the policy can be legally canceled. The offering of a grace period is not a state requirement. Also, a DUI conviction can also result in a policy cancellation.
One of the major differences between Pennsylvania and other states is that it is a no-fault state. There are 12 states in the country that are no fault. Pa goes one step further and is a no-fault "choice" state, which is rarer. Although consumers have more choices, it's important to understand the ramifications of selecting each option. A wrong choice could cost thousands of dollars in lost claims from litigation. However, once a selection is made, after a specific period of time, you can change your selection.
What Does "No-Fault" Mean?
In a no-fault state, each driver uses their own insurance policy to get compensation for injuries up to the personal injury protection (PIP) limit of their policy, regardless of who is at fault in the accident. No-fault coverage also limits the rights and ability of drivers to sue for damages. In Pennsylvania, it is possible to still sue, but only for “serious injury” accidents which usually require substantial impairment of bodily function or permanent and serious disfigurement. Medical treatment can be lengthy, and chronic conditions are often a result of the accident. Hundreds of thousands of dollars can easily be awarded, and in rare cases, millions of dollars.
Determining the scope and extent of injuries is a very difficult task and can determine which type of legal action to take. No-fault coverage only applies to personal injury, which means an at-fault driver can still be held responsible for property damages. So although you personally won't have to pay for bodily injury, if you cause serious damage to a building or structure, it's important to maintain adequate limits. $25,000 is common, but $50,000-$100,000 is recommended. Personal umbrella contracts can increase coverage to $250,000, although amounts of $1 million are more common.
Does your insurance cover another driver who borrows your car? There are many factors, but typically, coverage follows the vehicle. But you still need to be careful regarding who you give the keys to. You should never let a stranger or someone you know has a bad driving record, use your vehicle. And if possible, avoid letting teenagers or newly-licensed drivers borrow your car. If other members of the household are considered "high risk" or are required to have an SR-22 Bond, they should not drive your vehicle.
Therefore, if you hit or damage another car, building or property, if you are responsible (such as receiving a citation), your policy will have to pay the damage, up to the policy limits. Any amount exceeding that figure would be paid by the policyholder, not the insurance company. Thus, it is very important to select adequate bodily injury and property damage limits.
Choose Between Traditional And No-Fault
In Pennsylvania, drivers can choose between a no-fault policy and a traditional insurance coverage. If a driver chooses a traditional coverage policy, all options are still available regarding lawsuits. You can sue an at-fault driver and they can also sue you. So, although your rates may possibly reduce, your risk of having to pay higher out-of-pocket costs may increase, if you are proven liable for someone's personal injuries. Younger or inexperienced drivers often choose the no-fault option.
But regardless of which option you select, don't let your policy lapse. If it does, your vehicle registration will be canceled for 90 days. And unless you meet specific conditions, your license will also be suspended for 90 days. Before you get either of them back, you will have to pay a reinstatement fee of $50 and prove that you have active insurance coverage. Because of the lapse, it's possible you'll pay non-standard premiums, instead of receiving a preferred rate. The difference in premium depends on where you reside and the vehicles you own.
During this time, nobody else is allowed to drive the vehicle. If you are stopped by a police officer, you must show proof of coverage (usually your ID card is fine). Upon renewal, a new card is often issued, so it's important to replace the old ID card with the most current one. Also, if you are involved in an accident and are not covered, in addition to the fines and suspension, PennDOT will be notified. If you have multiple vehicles, don't forget to place the proper ID cards in the glove compartments of your vehicles.
Minimum Car Insurance Requirements In Pennsylvania
Like most states, Pennsylvania requires all drivers to carry certain types of car insurance at minimum coverage levels.
Minimum coverage amounts are:
• $15,000 (per person) personal injury protection for third parties
• $30,000 total per accident personal injury protection for third parties
• $5,000 per occurrence property damage protection
• $5,000 in no-fault PIP coverage
• In some situations, the state will accept an all-purpose policy with a minimum of $35,000 total coverage. Also, "single-limit" policies are sometimes used instead of the traditional "split-limit." Split-limits, however, are now rarely used across the US.
Although not required, uninsured and underinsured motorists protection can be purchased. Property damage is excluded, but members of your family are covered under the rider. You can also "stack" benefits when the uninsured and underinsured limits are multiplied by the number of vehicles you cover. Stacked benefits are automatically applied, unless you request to reject the option. Once approved, your premium will reduce. Lost wages can also be recovered with an additional rider, although proof of lost work may be required. Funeral expenses can also be covered, up to specific stated limits. The benefit will be paid regardless which party was responsible. Any life, final expense, or disability insurance coverage you privately own, is not impacted.
Higher Limits And Tort Options
Most experts recommend carrying a policy with much higher limits. If you are found at-fault and held liable in a serious accident, you will be help responsible for the excess settlement after your coverage limits have been met. This can be financially devastating, since it often involves making systematic payments for an extended period.
Although increasing your liability limits will result in paying a higher premium, you can offset the increase by raising your collision deductible on any vehicles with "full" coverage, or taking advantage of available discounts that you may not be aware of. Some of the common discounts that many policyholders forget to ask about are 55 and over, parking vehicle in a closed garage, having an AAA membership, alarm or theft-prevention devices, and student-away or good-student reductions.
NOTE: Limited or Full Tort benefits are offered. The "limited" option will cost less since recovering money for "pain and suffering" is more difficult than the "full" option. With the full tort coverage, there are no restrictions regarding suing the other negligent party. Therefore, if you can prove maximum damages, the award could be quite substantial. Of course, you may not be able to recover the entire amount if the negligent party does not have sufficient insurance and/or assets.
Where Do We Rank?
According to a national automotive site, Pennsylvania ranks 16th in the nation for rates. The average premium in the Keystone State is $1,604 per year. This amount is based on policy limits of 100/300/50 -- $100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident and a $500 deductible on collision and comprehensive coverage. Lower liability limits are more common and will reduce premiums. Households with no drivers under 25 will also feature better prices. Thus, states with older populations often have more competitive car insurance rates.
There is nothing more frustrating than getting hit by another vehicle and subsequently finding out they don’t have insurance. Luckily, Pennsylvania also has one of the lowest rates of uninsured drivers in the nation, with only 7 percent drivers without coverage. This helps the cost of uninsured and underinsured protection on personal and business policies. If you own more than two vehicles, the savings can total a few hundred dollars per year. States with the highest percentage of uninsured drivers include Oklahoma, Florida, Mississippi, New Mexico, Tennessee, Michigan, Alabama, and Colorado.
Car insurance laws in Pennsylvania keep your rates affordable, and help protect you if you are involved in an accident with another driver or pedestrian. The Pa Department of Insurance can frequently help prevent potential problems by providing rating and claims-paying ability information about companies licensed to do business in the state. You can easily review claims-related statistics for the last five years. Additional data on drivers and vehicles can also be compared.
Part of our job is to find the best rates and coverage from the top-rated companies. We also can help you understand what requirements are needed for your policies, and the quickest and most efficient way to apply, get covered and drive safely on the road. If personal or commercial liability requirements change, we will publish updates, explaining how they impact your coverage. For example, if the state minimum liability requirements change, we will immediately publish details, and make it easy to estimate the impact on your current premium.
January 2014 -- Proof of vehicle liability insurance will now be accepted by cell-phones during a traffic stop. Senate Bill 1040 is now law and will be effective on February 21st. Insurers also have the capability to transmit proof of financial responsibility ID cards with customer approval.
Pennsylvania is one of 30 states that have made this change. A lesser-known part of the Bill allows drivers to purchase "no-deductible" coverage for the collision portion of their policy. Already, comprehensive benefits, including glass breakage and theft, often feature a no-deductible option. Applying this to the collision portion of the policy will allow you to have no out-of-pocket expenses (including car rental) after an at-fault accident.
September 2014 -- Ride-sharing companies Lyft and Uber (two of the biggest) are active in the Pittsburgh area, although only on a temporary basis. The Pennsylvania Public Utility Commission is currently considering whether to allow the two companies permission to permanently set up business in Allegheny county and the rest of the state.
Smartphone apps connect customers with consumers that need to temporarily use a vehicle. The major concern is determining who actually should provide liability and physical damage coverage and how much.
October 2014 -- Ride-share companies are now attempting to gain approval to operate across the entire state, instead of just the Pittsburgh area. However, it appears that any vote regarding this new concept will be tabled until 2015. And in other bad news for Lyft, Uber and other companies, the Pennsylvania Public Utilities Commission may impose a $7 million penalty against Lyft for operating in the Pittsburgh area without proper approval.
The Philadelphia Parking Authority (PPA) regulates their local area, and has been resistive of approving these types of services in the area. However, consumers in the Philly area appear to be very interested in adding an alternative mode of cheap transportation.
March 2015 -- Progressive is now offering a policy that will cover drivers of Lyft, the ride-sharing company. It's a new program exclusive to Pennsylvania and Lfyt, so Uber, another ride-sharing company, will not be involved.
The new policy will include liability, medical payments, physical damage protection, along with uninsured and underinsured protection. The contract is not designed to supplement existing coverage, but rather replace the current policy. Because of that, the policy will also provide protection for Lyft owners when they are not driving for business purposes.
January 2017 -- Self-driving cars are coming to Pennsylvania. To be tested, that is. PennDOT would like to utilize the Keystone State for a new federal program that will test driverless vehicles. Pocono Raceway, along with parts of Pittsburgh would be used for testing. Pa Law requires that a live person must be in the vehicle at all times. Since the vast majority of highway accidents are due to driver error, support is growing for these types of vehicles.