Is Pennsylvania a No-Fault State?
When you become a victim of a car accident in Pennsylvania, it is important to understand how to file an insurance claim and what your responsibilities are so that you can receive the compensation to which you can receive the entitlement.
Part of any Pennsylvania insurance claim is understanding PA no-fault insurance, and understanding the difference between limited tort and full tort coverage in the state.
Some states in the U.S. are “no-fault” states, while others are states with fault-based insurance.
Pennsylvania is a mix between the two since drivers can decide between the limited tort and full tort options. The Pennsylvania Insurance Department provides information about the laws surrounding automobile insurance in the state.
So, is Pennsylvania a no-fault state? In short, Pennsylvania is a “no-fault” state, but motorists have the ability to opt out of the “no-fault” system when selecting full tort coverage.
Before getting into the specifics, it is important to understand the distinction between “no-fault” and “fault-based” auto insurance systems. Then, it is necessary to learn more about limited tort and full tort coverage options in the state. For any car accident claim, a Pennsylvania car accident lawyer can help.
What is a “No Fault” State for Insurance Purposes?
Generally speaking, a “no-fault” state for auto insurance purposes refers to a state in which each party handles filing his or her own insurance claim with his or her own insurance company in the event of an accident. To explain what we mean, we want to clarify how auto insurance claims work in a fault-based insurance state.
When you are not in a no-fault state, you generally have two options when filing an insurance claim after a car crash:
- First-party claim: You can file a claim with your own insurance company, regardless of whether you or the other driver is at fault. There are benefits and limitations to filing a first-party claim. When you file with your own insurance company, you are responsible for paying your deductible up front until the insurance company can determine liability, but at the same time, the claims process may go quicker.
- Third-party claim: You can file a claim through the insurance company of the negligent driver.
For example, if you have auto insurance through Geico and the other driver has auto insurance through State Farm, if the other driver handles the crash, you can file a claim through State Farm to seek compensation.
When you file a third-party claim, you are not responsible for paying any deductible, but the process can take longer, and your recovery may become reduced due to insurance limits on the negligent party’s policy.
When you are not in a no-fault state and have the two options listed above, you can also file a lawsuit against the negligent party (and any other responsible parties) if you are unable to get full compensation through an insurance claim.
Now, in a “no-fault” state, that third-party option is not available. Instead, you only have the option of the first-party claim. Moreover, your options can may seem limited for filing a lawsuit against the negligent driver if you are unable to receive full and complete compensation for your losses.
Limited Tort Versus Full Tort Coverage Under Pennsylvania Law
If you run a search for “Pennsylvania no-fault state,” you will find information about how Pennsylvania is one of a handful of states that follows a “no-fault” system.
Yet Pennsylvania is unique in the way its insurance system functions.
Under Pennsylvania law (75 Pa. Stat. § 1705), motorists can choose between “limited tort” versus “full tort” coverage.
Limited tort coverage allows drivers to save on premiums, but it means that they are part of the “no-fault” auto insurance system. With limited tort coverage, an injured motorist is still permitted to recover out-of-pocket medical expenses and other losses from the negligent driver, but the injured motorist is not permitted to recover non-economic damages in most cases.
Non-economic damages are those that are more subjective in nature and do not have a goal for a dollar value, such as pain and suffering or the loss of enjoyment of life. There are some exceptions, but non-monetary losses are not compensable.
Full tort coverage is different. By electing full tort coverage, and making the decision to pay a higher premium, a motorist is opting out of the no-fault system.
With full tort coverage, the injured motorist can seek full compensation from the negligent driver, including all economic or monetary damages (such as medical expenses), as well as non-economic or non-monetary losses (such as pain and suffering).
When it comes to property damage, regardless of whether you have limited tort or full tort coverage, you can seek compensation from the responsible driver.
Contact a Pennsylvania Car Accident Lawyer
Filing an auto insurance claim may seem complicated, and it can be difficult to know when to begin considering a lawsuit against the liable motorist.
In particular, given the complex nature of PA no-fault state, you may not know what options are available to you.
An experienced Pennsylvania car accident attorney can speak with you today. Contact PhillyLaw for more information.