What is No Fault Car Insurance?

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Lowenthal and Abrams, P.C.

Bala Cynwyd, PA

Practice Areas

Personal Injury, Workers Compensation, Medical Malpractice, SSDI, Auto Accident, Wrongful Death

Many states, including Pennsylvania, have what is called no fault auto insurance. Some believe that this means that if they hit another person with their car, each party pays for his own damage. This is incorrect.

No Fault Refers to Medical Bills

If you are a victim of a crash because of someone else's negligence, that person's auto insurance will pay to repair your car. Your own insurance will pay for your medical bills due to the physical damage you suffered, up to a certain amount. That amount relates to your PIP (personal injury protection.) Most people have $5,000 to cover medical bills that result from a car accident. This is rarely enough money, since even minor injuries can cause a trip to the hospital, which, as we all know, is extremely expensive. It is important to make sure you have enough insurance to cover yourself if you are seriously hurt in an accident. In Pennsylvania, your health insurance will normally take over once your PIP is exhausted.

Won't the Other Insurance Company Cover Medical Bills?

After an accident, the other insurance company may or may not cover your medical bills. This is where having a good attorney is so important. The reason for this is that there are many reasons that the other insurance company might refuse to pay your bills.

  • It doesn't believe its insured is responsible for the accident. - While you might be certain that the other person is responsible for the accident, the other insurance company might not agree. If this happens, you will need your personal injury attorney to fight on your behalf to get the benefits to which you are entitled.
  • It believes you have a pre-existing injury - If you were already injured, the other insurance company might claim that your medical bills are a result of a pre-existign injury and not due to the car accident. The insurance company will only want to pay for medical bills related to the accident.
  • There isn't enough insurance - This is a very common problem. If you only have $5000 in PIP and the other person only has the minimum amount of insurance required ($15,000 in Pennsylvania) now you can only recover the maxium amount of insurance. This means your PIP will cover $5000 and the other person's insurance will only pay out $15,000. It is at this point that you would seek to obtain more compensation from your own insurance company, up to whatever amount you have for underinsured motorist (also called UIM.) If you don't have UIM, the most you will be able to get towards compensation from either insurance company, will be the $5,000 for your medical bills from your own insurance company and the $15,000 available from the other person's insurance company. We have seen entirely too many people have to declare bankruptcy through no fault of their own, because they do not have enough auto insurance and they do not have health insurance. It is critical, for your own protection, that you have enough insurance to protect you.

Pennsylvania is No Fault - With a Choice

In Pennsylvania, you actually have a choice about your insurance. Your choice is between full tort and limited tort. This choice is extremely important. If you choose limited tort and you suffer only a minor injury, you cannot recover for pain and suffering. This means you could be out of work for a few days and suffer a lot of inconvenience, never mind some serious pain, but get no compensation for this experience. If you have full tort, you can recover for pain and suffering. It is critical to choose full tort, if you are able to do so.

Why is Pennsylvania No Fault?

No fault insurance saves both time and money. In many accidents, the amount of damage people suffer is minimal. However, if your own insurance company didn't pay for your medical bills, you would have to seek to get the other person's insurance company to cover them. This would mean you would end up in small claims court litigating a case over several thousand dollars in medical bills. This would take up a lot of time and resources for everyone involved. It is less expensive for the insurance companies to pay out the small claims for medical bills than it is for them to send a lawyer into court to litigate responsibility of a car accident over what is, to the insurance company, a small amount of money.

Seek Help from an Attorney

If you simply suffer property damage in a car accident, you will rarely need to retain a lawyer to help you. But, if you are injured, you ought to consider retaining an attorney to assist you. Insurance companies are not known for easily handing out money and you want to make sure that you obtain the full compensation to which you are entitled.

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