The law requires drivers in the Commonwealth of Pennsylvania and New Jersey to maintain a certain minimum level of liability coverage with regard to any automobile.  That coverage serves the important function of providing a fund from which an injured person may recover for injuries caused by the negligence of the person securing the coverage known as the “insured”.  Liability coverage also serves the equally important role of protecting the insured’s personal assets by providing a monetary barrier between the claims of an injured person and the personal assets of the insured  

Some other provisions of an automobile policy which get far less attention, however, are also designed to protect the insured as opposed to someone injured by the insured’s negligence.  Policy provisions such as “stacking”, the limited tort option (known in New Jersey as the “verbal threshold”) and uninsured/underinsured protections are critically important to the insuring relationship and may be the difference between a successful recovery and a recovery which is not enough to satisfy your own medical bills, even if you are involved in an accident caused by the negligence of someone else.  “Penny wise and pound foolish” is a dangerous proposition when it comes to automobile coverage.

We recently and successfully tried a week long jury trial in the Bucks County Court of Common Pleas where the predominant issue in the case was the clients’ election of the limited tort option in his auto insurance policy. By choosing the limited tort option, the client had relinquished his right to bring suit against anyone whose negligence may have caused him to be injured,  unless the accident resulted in a “serious impairment of a bodily function”.  In our case, the client had suffered a mild traumatic brain injury – a concussion.  Unlike the majority of individuals who suffer such injuries, our client did not recover as expected, and continued to suffer mild neuropsychological deficits such as difficulty in word finding and rapid processing of information. Notwithstanding those deficits, the client was able to return to his normal occupation.  Because our client had chosen the limited tort option, the tortfeasor’s insurer refused to make any offer of settlement whatsoever based on his neuropsychological deficits, offering only to satisfy the client’s lost wages.  Our negotiating position on behalf of our client in settlement discussions was clearly disadvantaged since the insurance company knew there was substantial potential that the very specific and nuanced nature of the injury would be difficult for a jury to grasp, and might lead a jury to conclude the client had not suffered a “serious impairment of a bodily function”.  While we were successful at trial, the matter is one which should and would have been resolved in settlement but for the election of limited tort coverage by the client.  Had our client invested in full tort coverage, he would have been spared an emotionally taxing and all-consuming trial on merits and damages.

     Deciding on an auto insurance plan, particularly after the rush of purchasing a new car, can be a deflating experience.  There are many confusing choices to sort through the most significant of which is the option to select either full-tort or limited-tort coverage.  While it’s certainly tempting to purchase the least costly option, savings at the front end can end up costing substantially more if you’re ever in an accident and hoping to recover more than your out-of-pocket medical costs.

    The Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”) is the statute that defines both full-tort and limited-tort coverage. Under the MVFRL, limited-tort coverage limits the rights of an insured to recover damages in a lawsuit. Unless a limited tort claimant suffers a “serious injury”, his or her recovery is quite limited and certainly not fully compensable for all of the consequences of an accident. “Serious injury” is as ambiguous as it sounds, and defined by the act as “death, serious impairment of bodily function, or permanent serious disfigurement.”  75 Pa.C.S. § 1702. While death and permanent serious disfigurement are relatively self-explanatory, whether the insured has suffered a “serious impairment of bodily function” is more often than not a question for the jury which is asked to evaluate the injuries suffered in terms of “the extent of the impairment, the length of time the impairment lasted, the treatment required to correct the impairment, and any other relevant factors.” Washington v. Baxter, 719 A.2d 733, 740 (Pa. 1988), Cadena v. Latch, 78 A.3d 636, 640 (Pa. Super. 2013).  Unless the jury decides that the injuries sustained, using these criteria, are “a serious injury”, a limited tort claimant can only recover his or her unreimbursed out of pocket costs (referred to as “economic loss” in the statute). He or she will receive no compensation for pain and suffering, loss of life’s pleasures, or the “non-economic loss” which so often has the most significant impact on an accident victim.