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Pennsylvania is one of the 12 no-fault states, and one of 18 states where drivers can have personal injury protection (PIP). If you are unfamiliar with the term 'personal injury protection', it is likely because it is called "First Party Benefits" (FPB) when you actually apply for a quote in Pennsylvania. The two terms mean and cover the same thing. We take a look at the Quaker State's no-fault law and discuss how drivers can file a claim, what they should expect and whether they should get the coverage.
Benefits of choosing FPB/PIP over traditional car insurance
Pennsylvania drivers can choose whether they want to have FPB/PIP on their policy. The difference is more than just a policy choice, however. The purpose of PIP is to avoid proving anyone at-fault in the accident. As a result, drivers can receive compensation swiftly, and without an arbitration which is costly and time-consuming.
When you opt for no-fault insurance, you are signing away your right to sue another driver for your injuries and emotional pain and suffering. There is no point in doing so if all of your expenses are hypothetically covered by your insurance. The only way a driver with PIP can sue another driver is if their injuries are severe in nature such as disfigurement and permanent disability. If you choose to have a traditional policy, one without FPB, you can sue other drivers for your damages, but you also leave yourself open to being sued.
The biggest benefit of a traditional car insurance policy (that is, without first party benefits) is the cost. FPB is likely to add at least $100 to your yearly premium. If you are accident-free for five years, you could end up saving at least $500.
When to choose health insurance instead of FPB
You should only consider not going with FPB if your health insurance plan covers you completely in a car accident. In this case, your injuries can be taken care of regardless of who is at fault. You should call your health provider if you are not sure if you are covered in car accidents.
Even if you do have health insurance, however, you should still consider adding a small amount of first party benefits because, in Pennsylvania, FPB is deductible-free. Most health plans, on the other hand, come with a deductible, which can be several hundred dollars. If your injuries from the car accident aren't serious, perhaps just $2,000 worth of ambulatory expenses, it would be cheaper to use your FPB since you don't have a deductible. Using your health policy may cost a $500 deductible. So while over the five years you may have saved $500 from your FPB premium, you will have just spent $500 on your health insurance deductible.
What is covered by first party benefits in Pennsylvania?
What is Covered by PIP/FPB? Pennsylvania FPB covers drivers for medical costs, lost wages, funeral costs and accidental death in the event of a car collision, regardless of who caused it. The coverage also extends to all members of your household and policy. Pennsylvania is different from other states because you need to purchase the four parts of the coverage separately.
Medical costs covered by FPB
Drivers in the Keystone State who opt for "no-fault" coverage are required to carry at least $5,000 worth of the medical payments portion of FPB. Drivers can buy coverage up to $100,000 and then buy even more coverage under an "Extraordinary Medical Benefits" up to $1,100,000. The following are all covered medical expenses:
- Hospital services
- Dental services
- Surgical services
- Psychiatric and physical rehabilitative costs
- Diagnostic services like X-rays
- Ambulatory services
Economic costs covered by Pennsylvania FPB
"Work Loss" is the part of your PIP/FPB that will reimburse you for lost wages due to a disability stemming from your injuries. In Pennsylvania however, you need to purchase this coverage separately from the medical benefits part. If you choose to buy this coverage, you are covered up to the limits you purchase. You will be entitled to 80% of your weekly earnings until you reach your policy limits. So if you make $1,200 a week, your first party benefits would pay you $960. If you select $5,000 worth of coverage, you would be covered for about five weeks. This benefit will also cover a "reasonable" amount, usually $12 to $30 per day, of household expenses such as cleaning services and snow shoveling.
Funeral benefits of Pennsylvania PIP
The third part of FPB which you can purchase is burial benefits. If someone were to tragically die in an accident, this benefit would pay for the associated funeral costs. If you choose to purchase this coverage, you will be entitled to at least $2,500 and a maximum of $5,000 worth of benefits. If the policyholder is the person who is killed, then the people in the household or next of kin would receive the benefits.
In Pennsylvania, you can also purchase an "Accidental Death" benefit. If someone insured under the policy dies from their injuries caused by the car accident within 24 months of the accident, the insured's next of kin or representative would receive the full amount of the limits which you purchased. Limits can be purchased at $5,000, $15,000 and $25,000.
When and how to file a first party benefits claim in Pennsylvania
If you get into an accident while carrying PIP/FPB insurance, you do not have to wait to prove the other driver at-fault in order to see benefits. You should file your PIP claim with your insurance company as soon as you are able to do so. Once you do, you will have to submit all of your medical bills, including a detailed list of the treatments you have received, directly to your insurance company. For lost earnings, you will likely need to submit a year's worth of your pay stubs to your insurance company. Your company may request an independent doctor to provide an evaluation to verify your injuries and treatment.
How much does first party benefit or personal injury protection cost in Pennsylvania?
Personal injury protection is rarely the cheapest part of your auto policy. By selecting different limits and coverages that best fit your coverage needs, however, you should be able to keep your premium reasonable. The following table details how different first party benefit premiums look for a 30-year-old male driver.
Price of PIP/Price of Policy
|$5,000 Medical/$0 Work Loss/ $0 Funeral||$95/$1,1778|
|$5,000 Medical /$5,000 Work Loss/ $2,500 Funeral||$100/$1,783|
|$100,000 Medical/$0 Work Loss/ $0 Funeral||$240/$1,923|
|$100,000 Medical/ $50,000 Work Loss/ $2,500 Funeral / $25,000 Accident Death||$323 /$2,006|
|Combined Benefits ($277,500 aggregate)^||$474/$2,158|
^ Combined Benefits is a lump sum of the four coverages
Going with very high car insurance limits can make your premium considerably pricier. As we alluded to above, however, you likely won’t need the high medical limits if you have health insurance that will cover your injuries in the event of an accident. FPB is a good supplement to your health insurance, but if your health policy will cover a car accident, you can save a good amount by not opting for the higher coverage.
On the other hand, if your health insurance deductible is fairly high, opting for higher limits can be useful. Since your PIP benefits do not have a deductible, you can save on out of pocket costs of your health insurance. You will have to do some math to see if your yearly payments will outweigh the potential of a costly deductible. Essentially, your five-year cost of FPB premiums should be smaller than the cost of your health deductible. For example, if your health insurance deductible is $750, your FPB premium shouldn't be higher than $150 per year.