Pennsylvania auto insurance law allows policyholders to waive their right to collect damages for pain and suffering. You do this by electing “Limited Tort” and you save about 20% of the “Full Tort” premium.
There are several claim circumstances when this waiver does not apply. They are
- If the at fault driver is from out of state
- If the at fault driver is convicted of DUI
- If your injuries are “serious”
So why wouldn’t you select “Limited Tort”- seems like a no brainer, right?
Here’s what we ask our clients to consider when making this selection.
What is a “serious” injury? It is not defined in the statue or the regulations. There may be some case law regarding this issue by now but what is serious to one may not be serious to you! For example, a facial laceration that leaves a 1 inch scar might not seem “serious” but if you earn your living in front of a camera, it sure is!
Will you need an attorney to pursue the at fault party to collect damages for your medical bills and lost wages? If so, then you will need “full tort”! Attorneys charge a fee that is a percentage of the damages they collect for you. Most medical costs are reimbursed to the health insurance company who paid them. The same happens with lost wages if you are fortunate to get either Workers Comp or Disability income- the insurance carrier is reimbursed. So what’s left to pay the attorney- future lost wages or Pain and Suffering damages. I know several folks whose cases were turned away once the attorney knew they had limited tort!
How much are pain and suffering damages worth? Normally they are a percentage of the total damages for medical costs and lost wages. Sometimes 25%; sometimes higher. Amazingly, attorney fees are about the same!
Bottom Line – What do I do?
This is a major decision for all car insurance buyers and should not be made lightly. We obviously recommend “full tort” as a default as there are other less risky ways to save premium dollars. But, sometimes, cash flow doesn’t permit us to buy the best. Selecting “limited tort” should only be a temporary situation until cash flow improves!
Let us help you with this situation by scheduling a Client Protection Review and, together, we can determine what the best decision is for you now. Call, text, email- whatever is easiest for you!