Auto Policy Declaration Example 1

This is Example 1 from our Blogpost “How To Read An Automobile Insurance Policy Declaration Sheet”

However, the term “Declaration Sheet” may differ depending on your insurance company.

*Disclaimer: The following is only applicable to PRIVATE PASSENGER MOTOR VEHICLES insured by a natural person (i.e. not a corporation) for policies issued in Pennsylvania subject to the Pennsylvania Motor Vehicle Financial Responsibility Law.*

Tort Status:

1. In this example, the “Tort” selection is clearly written out at the bottom of page 1. However, it may be found somewhere else on your Declaration Sheet depending on your insurance carrier.
2. IN ORDER TO FULLY PROTECT YOU AND YOUR LOVED ONES, OUR OFFICES RECOMMEND ALWAYS ELECTING “FULL TORT” INSURANCE.

If your Declaration Sheet reads “Limited Tort,” this is when your attorney would typically ask your insurance company for a copy of your “Tort Election” form, which must have been signed by the Named Insured on the policy. If they cannot produce this form, you are deemed to have elected “Full Tort.”* (An example of this form to follow). 

Liability Protection:

1. Turning to page 2 of the document, you can see that this policy provides for $100,000.00/$300,000.00 in bodily injury limits.
2. This coverage is to protect your assets if you (a named insured, or a member of your household) are sued/a claim is brought against you following a motor vehicle collision, i.e. if you have caused/are found at-fault for a collision under the law and someone has brought a claim for personal injuries against
3. Under Pennsylvania Law, you are required to have at least $15,000.00 in liability limits on your policy. Naturally, you can always select more, as seen in this example. We recommend at least $100,000.00, and potentially more depending on your financial situation.
4. Here, an injured individual could attempt to collect $100,000.00 from your policy; meanwhile, if multiple people have been injured, the total amount collectable by all injured persons would be $300,000.00, with no person receiving more than $100,000.00, under the policy.
5. Under the law, you are also required to have $5,000.00 in property damage liability. Here, that limit was increased to $100,000.00 in property damage, to protect you if another individual brings a claim for property damage against
6. If you are at-fault for an accident, and someone has put you on notice of a claim or lawsuit, it important that you tell your insurance carrier immediately, and they will help defend you in the claim/lawsuit as part of this liability protection.
7. This protection will generally not protect you if you are the individual injured in a collision.

 First Party Benefits:

1. Further down the same page, you’ll see what is called “First Party Benefits.” Often times this is referred to as “Personal Injury Protection” Benefits, or “PIP” benefits.
2. This coverage is used when you (a named insured or a member of your household*) have been injured in an automobile collision.
3. Under Pennsylvania Law, you are required to have at least $5,000.00 in PIP limits to help pay for your medical bills related to the collision. Naturally, you can always purchase more coverage, and you can add benefits such as wage loss, funeral expense, etc. We recommend at least $10,000.00.
4. Here, you can see that this policy provides for the mandatory minimum of $5,000.00 in Medical Expense coverage. This benefit can only be used to pay bills related to medical treatment received by you, a named insured, or a member of your household, as a result of being injured in a collision. It does not matter who was at-fault for the collision.
5. If you’ve been injured in a motor vehicle collision, it is important to give your automobile insurance information as your primary insurance to your medical providers, followed by any applicable health insurance plans.
6. This policy also provides for $1,000 per month or $5,000.00 total in income loss. Under PA Law, income loss benefits do not become applicable until you have missed 5 days of work. After that, you are compensated for a portion of your income lost
7. Income loss, accidental death, and funeral benefits, all listed here, are add-ons that you can add to your policy at an extra fee, but are not required. 

Underinsured/Uninsured Motorist Benefits:

1. Further down the same page, the policy provides for “Uninsured Motorists” and “Underinsured Motorists” benefits.
2. These benefits are primarily used when you (a named insured or a member of your household) has been injured in a car crash where another party may be found liable/at-fault for the collision and the at-fault driver does not have sufficient assets/coverage to fully and fairly compensate you for your losses.
3. When making an injury claim, you would first have to collect the full amount of the at-fault driver’s “liability limits” under their policy before you could use your “Underinsured Motorist” benefits, i.e. the other driver’s liability limits were not enough to fully compensate you for your injuries and damages sustained in the collision, and he/she would therefore be considered an “underinsured” driver.
4. If you were struck by an uninsured driver or hit in a hit-and-run, and were injured, you would make a claim against your “Uninsured Motorist” benefits similar to how you would make a claim against the other driver’s “liability limits.”
5. Automatically, your Underinsured/Uninsured Motorist benefits would be equal to your Liability Protection. However, you can elect to “Sign-Down” those limits to a lesser amount, or chose to have no Underinsured/Uninsured Motorist benefits altogether. We recommend at least $100,000.00.
6. You will note in this example that the Underinsured/Uninsured Motorist benefits are LESS than the liability limits. This is because the client SIGNED-DOWN their limits, limiting their protection against underinsured and uninsured drivers.
7. In this example, and similar to liability benefits, each injured person could collect up to $50,000.00 in benefits, but not to exceed $100,000.00 total among all injured persons.
8. Finally, the word “Stacked” on this policy indicates that the injured individual could “stack” his/her UIM/UM benefits, to increase the UIM/UM benefits available under the policy based on the number of cars insured on that policy. This can also be important if there are multiple insurance policies at issue.* Your policy can provide for “stacked” or “non-stacked” benefits.
9. In this example, there are 3 cars on the policy, meaning that the $50,000.00/$100,000.00 in benefits could be stacked (multiplied by 3) to equal $150,000.00 per person/$300,000.00 per accident in total benefits.

If you’d like to learn more, or you know someone who has been injured in an auto crash, please do not hesitate to contact our offices by phone, email or text messaging, and one of our experienced staff members/attorneys will be happy to help you.

Snyder Law Group 
(610)265-8050