The Problem With “Full Coverage”

Frequently, when discussing insurance coverages with new clients, they will proudly inform me that they chose (and have been paying for!) “full coverage” on their policy. Said aloud, it sounds great! But on paper? There is only one problem – you will never see it on paper because it DOES NOT exist in Pennsylvania. Unfortunately, unscrupulous or uninformed insurance agents may sell you a policy with the promise that you are receiving full coverage but the term is a misnomer. The laws of the Commonwealth only require citizens purchasing automobile insurance to purchase the following coverages in the minimum amounts stated:

  • Bodily Injury (Liability): $15,000.00 per person/$30,000.00 per accident
  • Property Damage: $5,000.00
  • First Party Medical Benefits: $5,000.00

Additionally, you are also obligated to make a tort election (full or limited) which may determine the legal rights you may have if you are injured in an accident that is someone else’s fault. This decision is more fully explained here (link to tort election blog). The first coverage, bodily liability, protects you against claims by other injured drivers if you are at fault for causing an accident. The second coverage likewise protects you against the claim of the other driver but this time for a claim for damage to their vehicle. The final coverage for medical benefits, also called Personal Injury Protection , or PIP, pays for your (and resident relatives’) medical bills following an accident regardless of who was at fault.

That means that all of the following coverages are not in fact legally required: Uninsured Motorist Coverage, Underinsured Motorist Coverage, Collision, Comprehensive, Income Loss, and Funeral Benefit. While insurers are legally required to offer you uninsured and underinsured coverage you do not have to carry the coverage and those are some important coverages! Unfortunately, when purchasing the minimum coverages discussed above, your insurance company or its agent may then declare you to be “fully covered” when this does not exist and is probably not the case.

If you have any questions about insurance coverages including recommended amounts, please feel free to contact me at 215-750-0110 to discuss.