Auto insurance is a tricky topic. How much coverage do you need? What kind? Is there anything you’re not legally required to have, but should have anyway? An insurance agent should be able to answer these and other thorny questions about your auto coverage, including what is best for your personal situation.
This series will examine in depth the various parts of a Pennsylvania auto insurance policy, including what the state requires you to carry, what your agent will probably recommend, and what coverage you can probably do without.
Agents, commercials, and policy documents will often throw jargon at you in order to impress you, confuse you, or even to patronize you. An agent’s job should be to educate his or her clients in order to help them make the best decision for themselves.
Bodily injury liability
The most important part of an auto insurance policy, and the part the state cares about the most, is “bodily injury liability” (BI). This is money that the insurance company pays to others, including both lawyers and victims, on your behalf if you are at fault for an accident where people are injured.
The coverage is typically expressed in a “slash” format, which is “thousands of dollars per person/thousands of dollars per incident.” For example, “100/300” means that you are covered up to $100,000 per person who gets injured, and up to $300,000 total per accident.
Pennsylvania requires its drivers to carry at least 15/30 in bodily injury liability coverage. This is known as “state minimum coverage”, and, frankly, it’s not enough. If you, as a driver, rear-end a car with three children in the back, and they all need to go to the emergency room, $30,000 in coverage will run out pretty quickly (especially if you get sued and have to hire a lawyer), and you will be personally responsible for the rest. Figure 100/300 as the minimum coverage you should feel comfortable driving around with, and get more if you can afford it.
Property damage liability
The next part of an auto policy is “property damage liability” (PD). Similar to BI liability, PD is the money that the insurance company pays to others on your behalf if you are at fault for an accident where property is damaged (i.e., the other driver’s car, a pole, or a building).
Pennsylvania requires minimum $5,000 PD coverage per accident, but, once again, that will not be enough if there is any significant damage done to the other person’s vehicle—five grand will not cut it if you total someone’s brand new Camry. Plan on getting at least $50,000 in PD coverage, $100,000 if you can swing it.
Oftentimes, bodily injury and property damage will be lumped together on your policy documents under the heading “BIPD”, formatted like this: 100/300/50, meaning, $100,000 per person and $300,000 per accident in BI coverage, plus $50,000 in PD coverage.
Coming up next column: What does ‘limited tort’ mean anyway?