The law requires drivers in the Commonwealth of Pennsylvania and New Jersey to maintain a certain minimum level of liability coverage with regard to any automobile. That coverage serves the important function of providing a fund from which an injured person may recover for injuries caused by the negligence of the person securing the coverage known as the “insured”. Liability coverage also serves the equally important role of protecting the insured’s personal assets by providing a monetary barrier between the claims of an injured person and the personal assets of the insured
Some other provisions of an automobile policy which get far less attention, however, are also designed to protect the insured as opposed to someone injured by the insured’s negligence. Policy provisions such as “stacking”, the limited tort option (known in New Jersey as the “verbal threshold”) and uninsured/underinsured protections are critically important to the insuring relationship and may be the difference between a successful recovery and a recovery which is not enough to satisfy your own medical bills, even if you are involved in an accident caused by the negligence of someone else. “Penny wise and pound foolish” is a dangerous proposition when it comes to automobile coverage.
We recently and successfully tried a week long jury trial in the Bucks County Court of Common Pleas where the predominant issue in the case was the clients’ election of the limited tort option in his auto insurance policy. By choosing the limited tort option, the client had relinquished his right to bring suit against anyone whose negligence may have caused him to be injured, unless the accident resulted in a “serious impairment of a bodily function”. In our case, the client had suffered a mild traumatic brain injury – a concussion. Unlike the majority of individuals who suffer such injuries, our client did not recover as expected, and continued to suffer mild neuropsychological deficits such as difficulty in word finding and rapid processing of information. Notwithstanding those deficits, the client was able to return to his normal occupation. Because our client had chosen the limited tort option, the tortfeasor’s insurer refused to make any offer of settlement whatsoever based on his neuropsychological deficits, offering only to satisfy the client’s lost wages. Our negotiating position on behalf of our client in settlement discussions was clearly disadvantaged since the insurance company knew there was substantial potential that the very specific and nuanced nature of the injury would be difficult for a jury to grasp, and might lead a jury to conclude the client had not suffered a “serious impairment of a bodily function”. While we were successful at trial, the matter is one which should and would have been resolved in settlement but for the election of limited tort coverage by the client. Had our client invested in full tort coverage, he would have been spared an emotionally taxing and all-consuming trial on merits and damages.
Similarly, we recently resolved a case involving a motorcycle accident where the client was injured by a negligent driver operating a vehicle while DUI. The terms of the client’s own insuring relationship left the client with little recovery even though his injuries were catastrophic. Of course, the intoxicated driver maintained only the state minimum insurance and possessed no real assets which could have been subject to execution. Our client, the insured, maintained uninsured motorist protection on his motorcycle. The client also maintained insurance on two other vehicles in the house, but none of the three vehicles were “stacked”. Stacking is a mechanism whereby uninsured and underinsured coverages can be aggregated among vehicles covered under the same policy; in other words, if all three vehicles had $100,000.00 in um/uim coverage “stacked” the available aggregate would have been three times the single policy limit or $300,000. Had the insurances applicable to these vehicles been stacked, the available uninsured/underinsured recovery would have been substantial. In the absence of stacking, the client was left with little recovery for his serious and permanent injuries. While in this particular example it may not, in fact, have been possible to stack the motorcycle coverage with the automobile coverage, the principle remains the same.
It is important to consider the risk you take on by choosing limited tort coverage on your automobile policy. The relatively minor increase in monthly rates for this coverage are well worth it to protect yourself and your family from substantial or even catastrophic loss should the worst occur.