Philadelphia Car Insurance Laws

Driving in Philadelphia requires compliance with Pennsylvania’s car insurance laws. Understanding these rules can help protect your finances and ensure you are legally covered in case of a car accident.

Mandatory Minimum Insurance Requirements

Pennsylvania mandates that all registered vehicles carry minimum liability insurance under 75 Pa. C.S. § 1702, commonly referred to as 15/30/5 coverage:

• $15,000 for bodily injury per person
• $30,000 for total bodily injury per accident
• $5,000 for property damage per accident

In addition to liability insurance, drivers must have First Party Benefits (FPB), which cover medical expenses for the policyholder and passengers, regardless of fault. The minimum required FPB coverage is $5,000 per person.

Choice No-Fault System: Full Tort vs. Limited Tort

Pennsylvania operates under a choice no-fault insurance system as outlined in 75 Pa. C.S. § 17, allowing drivers to select between two tort options:

• Full Tort: Provides unrestricted rights to sue an at-fault driver for pain and suffering and other non-economic damages.
• Limited Tort: Offers lower premiums but restricts the ability to sue for non-economic damages unless the injuries meet specific serious injury thresholds, such as death or permanent disfigurement.

This choice significantly impacts legal rights following an accident, making it essential for drivers to understand the implications of their selection.

Optional Coverages for Enhanced Protection

While the state mandates minimum coverage, drivers can opt for additional protections to safeguard against unforeseen circumstances:

• Uninsured Motorist (UM) Coverage: Protects against damages caused by drivers without insurance.
• Underinsured Motorist (UIM) Coverage: Covers expenses when the at-fault driver’s insurance is insufficient.
• Collision Coverage: Pays for damages to your vehicle resulting from a collision, regardless of fault.
• Comprehensive Coverage: Covers non-collision-related damages, such as theft or natural disasters.
• Gap Insurance: Covers the difference between the vehicle’s actual cash value and the amount owed on a loan or lease if the car is totaled.

These optional coverages provide an added layer of financial security and are especially beneficial in Philadelphia, where traffic density increases the risk of accidents.

Penalties for Non-Compliance

In Pennsylvania, the penalties for failing to maintain required auto insurance coverage are outlined in Title 75, Section 1786 of the Pennsylvania Consolidated Statutes, which include:

• Minimum fine of $300
• Three-month suspension of vehicle registration and driver’s license
• Restoration fees and proof of insurance required for reinstatement
• Vehicle impoundment during the suspension period

To avoid these consequences, it is critical to maintain continuous coverage.

Claims Process and Insurer Obligations

Pennsylvania law (75 Pa. C.S. § 1716) requires insurance companies to pay first-party benefits within 30 days after they receive proper proof of a claim. If they delay payment, they must pay interest on the overdue amount. Under 75 Pa. C.S. § 1713, the law assigns payment responsibility based on your relationship to the vehicle and the accident. This section ensures that the correct insurer pays your claim in the proper order.

As far as how long you have to notify your insurer of an accident or file a claim, state law does not set a fixed deadline. Instead, the timeframe is dictated by the terms of your insurance policy. Most auto insurance policies require the insured to give notice of an accident “promptly,” so you are generally expected to report the accident to your insurer as soon as reasonably possible.