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Limited Tort In PA: The Common Sense Guide To An Attorney’s Nemesis 

The limited tort option within Pennsylvania personal auto policies?

Dirty, dirty words…

Google “limited tort”, and you will quickly see what I’m talking about.

Limited tort is a bad choice for you and everyone else in the state, according to our legal friends. If you choose the limited tort option over the full tort option you may be made to feel grossly exposed, and not insured properly.

Your tort choice on your policy is a relatively subjective one, even after you are educated on the differences between the two. But despite all the continued legal blogs and writings against the limited option over the past 25 years, it remains a very popular AND effective cost-savings alternative.

Since the limited tort option was made available in Pennsylvania, (July 1990), the pricing differential between full and limited tort has become substantial. Why? Because limited tort works!

It has resulted in significant cost savings for insureds and insurance companies alike. As limited tort came of age, the difference in rates became more and more significant. After many internet searches, there appears to be virtually nothing positive written about limited tort.

Hmmmm… Again, WHY? Because nearly everything written about it is created by attorneys. It seems odd to me that numerous law firm websites mention “limited tort” horror stories but only in veiled generalities. Although I’ve never performed an actual count, I would guestimate about 70-80% of my personal auto clients carry the limited tort option. And I can also say, within our agency we have NOT encountered ANY so-called “horror stories”. My clients were educated on the subject and the cost differentials, then left to make their own decisions.

Insurance agents and companies tend to write about the options in a very non-committal way, much as I am in this article. This again, because of the subjective decisions which ultimately need to be made by you as the insurance policyholder. My duty to you is to educate, not to make your decision for you. I cannot tell you limited tort is the best piece of chocolate in the box. But an attorney CAN, safely and without repercussion, tell you it’s the least tasty piece. That doesn’t mean it’s gospel.

I suppose attorneys tend to educate as well, but with one difference. Their “education” on the matter seems to be slanted toward coaxing policyholders into choosing the full tort option via fearmongering. Remember whose pockets this lines. There’s no guarantee it’s yours. And it’s certainly not your insurance company’s. The additional monies used by insurance companies to pay successful full tort lawsuits will come back to us all in the form of higher policy rates.

The premium savings for limited tort mentioned on numerous law firm websites is grossly understated. I suppose some have not researched that aspect too thoroughly in the recent past and perhaps websites have not been updated. In my experience as an insurance agent, I see significant reductions in premiums when the limited option is chosen. This is particularly true when there are numerous vehicles and/or when young drivers are included on a policy.

And why was limited tort legislated? The answer is very simple. To curb frivolous lawsuits.

As a consequence of the limited tort option working so well in Pennsylvania, other coverage sections of the personal auto policy are being sucked dry for all they are worth. In particular, the very misunderstood Uninsured and Underinsured Motorists coverages. I will be writing about those two critters in a separate blog.

I have met only a few people who were adamant about having full tort when the subject came up. And to me, it was of no surprise. I could sense it was just part of their demeanor to not compromise. And that’s what limited tort is… A compromise. You relinquish your full and unbridled ability to sue a third party for something as minimal as yes… a HANGNAIL. Theoretically it could be done. I’m certain the case would go to court since I don’t believe a company with a lick of sense would give into something so ludicrous.

The sad part of frivolous lawsuits is that your insurance company is contractually obligated to defend you, even against this kind of craziness. And that costs money. Defense costs can easily approach tens of thousands of dollars, if not more. Attorneys aren’t cheap.

And it still does not seem to be common practice for those throwing frivolous suits to be held legally responsible for paying the defense costs of the plaintiff if the suit is lost. In certain arenas of law and in certain states, this does exist, but is not the norm.

Here is a short Q&A which will help you in the decision making process of full vs. limited tort:*

The Choices:

Limited Tort: Limits your right to sue for pain and suffering, except in cases of “serious injury”. This “limited tort” option qualifies you for a reduction in your premium.

Full Tort: Does not limit your right to sue. You do not qualify for a reduced premium if you elected the “full tort” option.

Q: If I choose the “limited tort” option, what am I giving up?

A: You are giving up the right to sue for non-economic damages, more commonly known as “pain and suffering,” except in cases of serious injury. The law defines serious injury as death, serious impairment of body function or permanent, serious disfigurement. If your injury is determined to be serious, you will keep your right to sue for non-economic damages even if you have elected limited tort.

This selection will be effective whether you are going after the responsible driver’s insurance company, or if you are filing the claim with your own insurer, under an uninsured or underinsured motorist claim.

Q: Apart from serious injury, are there any other exceptions if I choose limited tort?

A: Even if you’ve elected limited tort, you can still sue for pain and suffering under certain circumstances. Common examples are when the responsible driver is convicted of, or accepts Accelerated Rehabilitative Disposition for, driving under the influence of alcohol or a controlled substance, if the responsible driver’s vehicle is registered in another state, or if the at-fault party is uninsured.

Q: If I choose limited tort, can I still sue for my economic damages, such as unpaid medical bills, un-reimbursed lost wages or other out-of-pocket expenses?

A: Yes. You can still sue to recover these damages.

Q: If I choose limited tort, can I still be sued by someone else?

A: Yes. Your selection of limited-tort applies to your ability to sue others under your policy. Should you be at fault in an accident, the injured parties can seek recovery from you for any economic damages. Their ability to sue you for non-economic damages is determined by whether they elected the limited tort or full tort option on their own policy.

Q: What do I get in return for choosing limited tort?

A: You should receive a reduction in premium for choosing limited tort. The reduction you receive could be up to a 40 percent of the premium you pay for bodily injury, first party benefits and uninsured and underinsured motorist coverages.

Q: Do these savings apply to other parts of my auto coverage?

A: No. The premium for other coverages under your personal automobile policy, such as comprehensive and collision, are not affected by your tort selection.

Q: How do I know what I should do?

A: Making such a personal decision about your options is yours – and yours alone under the law.

So I suppose when all is said and done, this decision, as with many in life, comes down to a leap of faith. Not every eventuality in life is insurable. Not every life event has the outcome we’re expecting. That is a fact. Make an informed decision, but one also based on what your gut says is right for you. Then live with that decision (although it can be changed at any time as long as an incident has not occurred).

If you can afford it and want to be able to sue in every potential scenario, then full tort is your baby. Otherwise, if you are a realist, with a practical mind, and with an eye on your expenditures, limited tort could be a reasonable compromise.

As I’ve always said, “There is NO amount of money that will make your pain go away permanently. When the adrenaline wears off after you receive your big settlement check, the pain will still be there.”

Talk with your agent. Ask questions. Educate yourself. Figure out what is important to you within the tort coverage framework, including premiums differentials. Then choose the option which is most appealing to you based on your tolerance for risk, personal circumstances, and your ability to pay for the coverage.


Brian Matthias

 *QA courtesy of Insurance Agents and Brokers Association of Pennsylvania, Maryland and Delaware- of which Matthias Insurance Agency Inc is a member