Presentation on theme: "Financial Responsibility Your insurance protects you against financial loss that may result from a traffic crash."— Presentation transcript:
Financial Responsibility Your insurance protects you against financial loss that may result from a traffic crash.
Financial Responsibility It is mandatory in the Commonwealth of Pennsylvania for all motor vehicle owners to carry a minimum amount of liability insurance or proof of financial responsibility on a currently registered vehicle. All vehicles must be insured, and you must carry proof of this insurance at all times in the vehicle. This proof often is in the form of an insurance card that your insurance company will give to you.
Financial Responsibility Your insurance protects you against financial loss if you get involved in a traffic crash. The insurance policy is a contract between you and your insurance company where you agree to pay the premium (the cost of your policy) and the company agrees to pay for your losses. The policy you purchase defines your coverage, or what the company will pay for in a traffic crash. For example, if you have a policy that covers $10,000 in damages that you cause, the insurance company will pay up to $10,000 of your costs, which you don't have to pay out of your pocket. No, you won't be paying $10,000 to get that amount in coverage; you only need to pay the premium. That's a good bargain! In addition to the savings, you also must be insured in order to: Register your vehicle and obtain a Pennsylvania license plate for it; Renew or replace your existing Pennsylvania vehicle registration; and Legally drive your vehicle.
Financial Responsibility What is liability insurance? Liability insurance pays for collision losses that are your responsibility. There are two types of liability insurance that you must get in Pennsylvania: Bodily Injury Liability. This pays your legal costs and claims against you if you injure or kill someone with your car. Often it will cover family members who live with you and anyone who is driving with your permission. Property Damage Liability. This pays your legal costs and claims against you if you damage someone else's property with your car. It does not cover your property, including your car.
Financial Responsibility What is “no-fault” insurance? A traffic crash can be quite expensive to the parties involved. Therefore it may make sense to determine who was at fault so that the responsible party pays for the damages. But determining who was at fault can be difficult. One solution is “no-fault” insurance, which is insurance that pays for damages to your car regardless of fault. This means that each party’s own insurance company pays for their losses in a crash, limiting their ability to sue or recover damages. This helps the involved parties avoid lengthy court battles that sometimes occur after a crash. Pennsylvania has a “choice no-fault” insurance system, which means that you may choose between full tort and limited tort coverage. With full tort coverage, you have full rights to seek recovery for damages resulting from a crash, including costs of pain and suffering. However, other people also have the right to sue you if you are at fault. With limited tort coverage, your right to sue is limited to out-of-pocket medical and other damages. Instead your own insurance company pays for your damages. This choice may be appealing because it will allow you to save on your premium.
Financial Responsibility Driving Without Insurance So what happens if you do not have insurance or allow your coverage to lapse? You will face harsh penalties, including fines and the suspension of your vehicle registration. The Commonwealth of Pennsylvania defines a "lapse" as more than 30 days without continuous insurance coverage. If your liability coverage lapses for any reason, you can expect the following penalties and expenses: Three-month suspension of your vehicle registration $50 restoration fee to reinstate your vehicle registration Three-month suspension of your driver's license, if PennDOT determines that you operated your vehicle or allowed anyone else to operate your vehicle during the lapse Minimum fine of $300 for driving uninsured $50 restoration fee to reinstate your driver's license You will be asked to surrender your vehicle registration plates, stickers, cards and driver’s license in order to serve the suspension. This will also mean that no one else may operate your vehicle during the suspension. It is illegal to operate a motor vehicle in the Commonwealth of Pennsylvania without insurance. Always be sure that your vehicle is properly insured at all times, even when it is off the road due to repairs or you are storing your vehicle and not driving it.
Financial Responsibility Types of Auto Insurance
Financial Responsibility In Pennsylvania, you are required to have bodily injury and property damage liability insurance, in addition to medical benefits coverage and either full tort or limited tort coverage.
Financial Responsibility In Pennsylvania, you are required to have liability insurance (bodily injury and property damage) and medical benefits coverage, and you must choose either full tort or limited tort coverage. But you have the option of purchasing more insurance to protect yourself financially. Although they are not required, they may help to protect you even more. They do cost money, and you will have to pay a predetermined amount for the deductible, which is the amount you must pay before your insurer pays for your claim. Most auto insurance companies offer these types of coverage in additional to liability and medical benefits: Collision - This pays for damages to your vehicle caused by a collision, regardless of who is at fault. You may be required to get this coverage if you have a leased car or it is financed. You should get this anyway if your car is a recent model or worth at least $4,000.
Financial Responsibility Comprehensive Physical Damage - This pays for damages to your vehicle caused by fire, hail, floods and other "acts of God", as well as vandalism, theft, and collisions with deer. You should get this if your car is a recent model or worth at least $4,000. Uninsured or Underinsured Motorist - This pays for all costs related to injuries to you or your passengers caused by an uninsured, underinsured, or hit-and-run driver. Even though Pennsylvania requires all drivers to have liability insurance and insurers to report when a driver terminates coverage, some may slip through the cracks. If an uninsured, underinsured, or hit-and-run driver injures you, you will be stuck with the bill (or most of the costs if the driver is underinsured). If you can afford it, you may want to get this coverage. Income Loss - This pays for a part of any wages you may have lost when the injuries you sustained in a crash keep you from working. Car Rental Reimbursement - This pays for a rental car up to a specified amount per day while your car is being repaired as a result of a traffic crash. It usually covers rent payments for up to 30 days. This coverage usually adds only a few dollars to your policy. Towing and Labor - This pays for towing and labor charges up to a specified amount when your car breaks down. Automobile clubs also offer this service, so you may not need this if you are a member of one.
Financial Responsibility Choosing an Insurance Company The insurance company you choose must be licensed to do business in the Commonwealth of Pennsylvania. You need to be aware that many insurance companies in Pennsylvania that are not approved still choose to offer liability insurance to drivers. The licensed companies have met all the requirements and guidelines as prescribed by the Pennsylvania Department of Insurance and are consequently rated for reliability, among other factors. It is your responsibility to ensure that your own insurance company or underwriter complies with state regulations. Coverage with an insurance company that is non-licensed exposes you to the risk of nonpayment of claims and insufficient overall coverage. If you are not sure about the insurance company you have chosen or are considering, you can call the Pennsylvania Insurance Department at 1-877-881-6368 or visit the department’s website.
Financial Responsibility Your Responsibility in a Collision A collision or crash is where you injure yourself or another person or cause any property damage while driving your vehicle. A collision can occur with another vehicle that is in motion or even a parked vehicle. Leaving the scene of any collision is a CRIME! The following are things you must do if you get involved in any collision: The first thing you must do is STOP at a safe place at or near the scene. If your vehicle is in a place where it may cause another collision, then move it. If the vehicle is not in a dangerous spot, leave it there until a law enforcement officer tells you to move it. In an accident involving only property damage, you must move your vehicle out of traffic if you can do it safely. If anyone is hurt in a collision, call for the police right away. Don't move any person who is injured, but you should keep a victim in shock as warm as possible. If there is no pulse, a properly trained person should administer CPR. Call the police if any vehicle needs to be towed. Warn other drivers who may be approaching if you can do it without putting yourself in jeopardy. If it is night or the weather is bad, use flares, reflectors, or flashlights. Exchange the following information with all involved parties: your name, your address, your telephone number, vehicle registration number, the name of your insurance company, and policy number. If you are involved in a collision and damage an unattended vehicle or other property, you must either find the owner or provide your name and telephone number where you can be reached, along with the date and time of the crash, on a note and leave it in a place where it can be easily seen. If the police do not come to investigate the crash and someone has been injured or killed or a vehicle needs to be towed, you will need to complete and send a Driver’s Accident Report Form (AA-600) to PennDOT within five (5) days.
Chapter 2- Journal 1 WHAT DO YOU THINK? Some experts recommend carrying a camera in your vehicle that you can use in case you get involved in a crash. What do you think are some of the benefits of taking your own pictures of a collision scene?