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Q: I recently moved to Pennsylvania from another state and I am about to buy auto insurance here for the first time. My insurance agent is highly recommending limited tort coverage, and it’s cheaper than full tort. Is limited tort insurance a good deal?

A:

Insurance companies love to promote limited tort car insurance in Pennsylvania because those sales are a very, very good deal—for them. For the consumer, the value of the deal is questionable.

If you own or drive a car in Pennsylvania, you must have insurance coverage. The law even tells you the minimum insurance coverage you’re required to buy:

  • Drivers must carry liability insurance worth at least $15,000 for one individual and $30,000 for all individuals hurt in an accident.
  • Car owners must carry at least $5,000 in coverage for first party medical benefits.

Of course, you are free to buy more than these minimum policies, or to invest in other forms of insurance protection. We generally advise buying significantly more than the minimum requirements as well as obtaining coverage against accidents caused by uninsured and underinsured drivers.

When you have decided the level of insurance coverage that is compatible with your budget and your peace of mind, the next question to address is whether you will buy full tort or limited tort insurance. Both types of insurance will cover your economic losses after a Pennsylvania car accident; this category includes medical expenses, lost income, and property damage. Only full tort insurance provides compensation for non-economic losses, such as pain and suffering, disfigurement, changes in the quality or frequency of sexual relations, inability to enjoy hobbies or recreation, and other losses that can’t easily be expressed in terms of money.

This is important, so let’s highlight it again: If you choose limited tort insurance, you are not covered for most non-economic losses. This is true (with a few limited exceptions) both for insurance company settlements and lawsuits against the at-fault driver. You have surrendered your rights to pursue this compensation when you chose cheaper insurance.

It’s true that limited tort insurance is cheaper. On average, the premiums for limited tort coverage are about 15 to 20 percent cheaper than comparable full tort coverage. Insurance agents like to hype the savings, too, because their companies are happy to sell as many limited tort policies as possible. Because Pennsylvania is a no-fault auto insurance state, the primary source of coverage after a car accident is the policyholder’s own insurance; thus, the insurance company gets significant savings on every claim that is filed under a limited tort policy rather than a full tort policy.

Of course, you have the mirror image of that perspective: with limited tort, you’re saving a little bit in monthly premiums, but you’re going to sacrifice thousands of dollars off your potential claim if you ever get hurt in an accident. At that point, all the “savings” you have accrued are wiped away by a single car crash.

Our car accident injury lawyers deal with questions about limited tort insurance on a daily basis. We have been highly successful in helping clients with limited tort car insurance get the maximum available compensation for their claims. If you have a question or if you need help after a Pennsylvania motor vehicle accident, contact Schmidt Kramer today at 717-888-8888 or 888-476-0807 toll-free to schedule a free, confidential case review.

Just for calling us, you are eligible to receive a FREE copy of our client brochure, Who Pays the Bills When You Are Injured in an Automobile Accident? Request your copy during your call.

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