Pennsylvania auto questions come from two laws:

• The Motor Vehicle Financial Responsibility Law (MVFRL, 75 Pa.C.S. Chapter 17), which covers limits, first-party benefits, the limited vs. full tort election, UM/UIM and stacking, the assigned risk and assigned claims plans, and required discounts.
• Act 68 (40 P.S. 991.2001 et seq.), which covers cancellation and nonrenewal.

The policy form itself (Parts A-F) is covered in the national Personal Auto Policy guide.

Required coverage

Minimum limits (75 Pa.C.S. 1702, 1711)

Rules on required coverage

• Motorcycles: the $5,000 first-party medical requirement doesn't apply (1711(a)).
• Minimum policy: insurers must make available a policy with only the minimum liability and medical benefit (1711(b)).
• Who is an insured: a spouse or relative living in the named insured's household (1702).

Proof of insurance (1786)

• Every registered vehicle owner must keep insurance and show proof. A paper or electronic ID card is acceptable.
• Penalties for no insurance:
  • Driving without coverage is a summary offense with a $300 fine.
  • PennDOT suspends the vehicle registration for 3 months. There is no suspension if the owner proves the lapse lasted less than 31 days and the car wasn't driven.
• Unpaid judgments: an accident judgment unpaid after 60 days can be sent to PennDOT, which suspends the debtor's driving privilege (1771-1773).

First-party benefits (75 Pa.C.S. 1711-1725)

How first-party benefits work

• They pay the insured's own medical bills regardless of fault.
• Order of payment: the injured person's own policy pays first, even as a passenger in someone else's car. A pedestrian with no policy of their own collects from the policy on the vehicle involved (1713).
• First-party medical benefits pay before group health insurance (1719).
• The auto insurer can't recover them from the claimant's tort recovery (1720).
• First-party benefits do not stack across vehicles (1717).

Optional benefits

• Income loss: 80% of gross income lost, starting after 5 working days (1712).
• Funeral benefit.
• Accidental death: death within 24 months of the accident (1712(3)).
• Medical: up to at least $100,000 must be made available (1715).
• Combination benefit: up to at least $177,500 (1715(a)(5)).
• Extraordinary medical: above $100,000, up to $1.1 million, paying no more than $50,000 a year and $1 million in total.

Claims and payment

• Benefits are overdue after 30 days from reasonable proof, and carry 12% interest (1716).
• Suits for benefits must be filed within 4 years of the accident if nothing has been paid (1721).
• Hospitals can't balance-bill the insured (1797).
• An insurer wanting peer review challenges a bill within 90 days (1797(b)).

Exclusions

• Insurers must exclude an insured whose conduct contributed to the injury while committing a felony or fleeing police (1718).
• A provision denying first-party benefits because the driver was intoxicated is void (1724).
• An uninsured owner of a registered vehicle can't recover first-party benefits (1714).

Limited tort vs. full tort (75 Pa.C.S. 1705)

The two options

• Full tort keeps the unrestricted right to sue for pain and suffering.
• Limited tort costs less. The insured may recover medical and economic losses but not pain and suffering, unless the injury is serious: death, serious impairment of a body function, or permanent serious disfigurement.

Who the election covers

• It applies to the named insured and household members.
• With two named insureds, either one may elect for both.

Defaults

• If the applicant makes no election, the insured is presumed to have chosen full tort.
• If the insured doesn't respond to the first notice within 20 days, the insurer sends a second, final notice.
• An owner of a registered vehicle who carries no insurance is deemed to have chosen limited tort.

Exceptions: a limited tort insured keeps full tort rights when:

• The at-fault driver is convicted of DUI for that accident.
• The at-fault vehicle is registered in another state.
• The insured is hurt while riding in a vehicle that isn't a private passenger car, such as a city bus.

Underwriting: an insurer may not nonrenew because the insured chose full tort (1705(e)).

Uninsured and underinsured motorist (75 Pa.C.S. 1731-1738)

Offer and rejection

• UM and UIM must be offered. The named insured may reject each one only on a separate, signed and dated rejection form from the first named insured.
• If the insurer can't produce a valid rejection, UM/UIM equals the BI liability limits (1731(c.1)).

Limits

• UM/UIM limits may be equal to or lower than the BI limits, never higher (1734).
• You can't collect UM and UIM for the same accident (1731(d)(1)).
• A limited tort insured with a non-serious injury collects economic losses only under UM (1731(d)(2)).

Stacking (1738)

• UM/UIM limits stack across vehicles unless the named insured signs the statutory waiver. A waiver must reduce the premium.
• Example: three cars with $50,000 UIM each, not waived, gives $150,000 of UIM.

Assigned risk and assigned claims

Assigned Risk Plan (1741-1744)

• Drivers refused in the voluntary market get coverage through the Pennsylvania Assigned Risk Plan.
• A clean risk assigned to an insurer gets the insurer's voluntary market rate.
• Plan rates may not be inadequate, excessive or unfairly discriminatory.

Assigned Claims Plan (1752-1754)

• For residents with no registered vehicle and no other source of benefits.
• Pays up to $5,000 of medical benefits.
• Also pays up to $15,000/$30,000 where the claimant could sue an uninsured driver.

Required offers, discounts and surcharges

Required offers (1792)

• Insurers must make available BI, UM and UIM limits up to at least $100,000/$300,000.
• They must offer a $500 collision deductible. Lenders may not require a deductible below $500.

Surcharges (1793)

• An insured's premium may go up because of a paid claim only if the insured was at fault.
• Paying a first-party medical claim can't lead to a surcharge or points (1799.3).
• Insurers deliver a surcharge disclosure plan at application and at least annually.

Discounts

• Passive antitheft devices: at least 10% off comprehensive (1799.1).
• Two airbags: at least 30% off first-party benefits (1799).
• Drivers 55 and older: at least 5% on all coverages when all named insureds are 55 or older and completed an approved driver improvement course (1799.2).

Required notices

• The statutory Important Notice at application (1791).
• An itemized invoice and tort notice at application and every renewal (1791.1).
• A first-page notice saying whether the policy covers collision damage to rental vehicles (1725).

Other rules

• Dealer loaner cars: the insured's own policy is primary (40 P.S. 991.2007.1).
• Unearned premium after an insurer cancellation is returned within 30 days, with 12% interest if late (1793(c)).
• Repair shops: the insured has the right to choose the repair shop. Appraisals must say no specific shop is required (31 Pa. Code 62.3).
• Total loss reports: a licensed physical damage appraiser gives the consumer the total loss evaluation report within 5 working days.

Cancellation and nonrenewal (Act 68, 40 P.S. 991.2001-991.2013)

Scope and the first 60 days

• Act 68 doesn't apply to Assigned Risk Plan policies.
• During a new policy's first 60 days, the insurer must state its reason in writing and can't use a prohibited ground.

Midterm cancellation after 60 days is allowed only for:

• Nonpayment of premium.
• Suspension or revocation of the named insured's license or registration.
• Material misrepresentation or concealment.

Notice (991.2006)

• At least 60 days for cancellation or nonrenewal.
• Only 15 days for nonpayment or license or registration suspension.
• The notice must say that PennDOT is being notified and that replacement coverage is required.

Prohibited reasons for nonrenewal or cancellation (991.2003)

• The insured's age or lawful occupation.
• One accident in the 36 months before the anniversary date.
• Accidents where the insured wasn't at fault, such as being rear-ended without a citation.
• Comprehensive claims, such as hail, unless the insured caused the loss intentionally.
• Two or fewer moving violations in 24 months when the named insured has 5 points or fewer, unless all came from one violation.
• For 12 months after an agency termination, the insurer may cancel or nonrenew that agent's policies only if it could have done so anyway.

Review by the Commissioner

• The insured may ask the Commissioner to review within 30 days of the notice (991.2008).
• The Commissioner orders reinstatement or upholds the action within 40 days (991.2009).

Common exam traps

• 15/30/5 liability plus $5,000 first-party medical. Pennsylvania's property damage minimum is just $5,000.
• No tort election means full tort. Uninsured owners are treated as limited tort.
• Stacking is the default. It must be waived in writing, and the waiver lowers the premium.
• UM/UIM can't exceed BI limits. No valid rejection means UM/UIM equals BI.
• Act 68 notice: 60 days, or 15 for nonpayment or suspension.
• First-party benefits pay before health insurance, don't stack, and can't be denied for intoxication.