What is the Motor Vehicle Financial Responsibility Law?



Since the effective date of the Act, July 1, 1990, all motor vehicle owners must prove they have "financial responsibility" to be able to register their vehicles. It means that the owner of the vehicle must be able to pay for damages caused to another person. The minimum required is $15,000 per person for injuries in one accident, $30,000 for injuries to more than one person, and $5,000 in property damage to someone else's property.

If you own a vehicle but do not purchase insurance, you are not allowed by law to bring an action for your own damages.

Your own insurance will pay for your medical bills and lost wages. This is first-party coverage, and you should always purchase enough to protect yourself. If the other driver was at fault for the accident, the other driver's insurance will provide liability coverage for you for those damages not covered by your own insurance. This is called third-party coverage.

Recommended Coverage.

Many clients ask me what insurance coverages I recommend. I recommend purchasing $100,000/$300,000 in liability coverage to protect yourself from a liability claim if you cause an accident. You should also have $50,000 in property damage coverage.

To protect yourself, you should have $50,000 in medical benefits, the maximum in wage loss benefits and full tort. If you have more than one car, the coverage should be stacked. You should purchase uninsured/underinsured coverage equal to your liability coverage.

Don't lose your right to sue.

Many vehicles in Pennsylvania are driven without insurance coverage, or have the minimum coverage required by law. For that reason, you need to carry uninsured/underinsured coverage on your own car.

You should have full tort coverage. Limited tort coverage does not limit the other driver, it limits your right to recover damages such as pain and suffering. If you purchased full tort, you can sue the other driver for all of your damages, including pain and suffering.

You don't have full coverage for yourself and your family if you don't have full tort and uninsured/underinsured motorist coverage, in addition to the required liability coverage.

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