PENNSYLVANIA MOTOR VEHICLE FINANCIAL RESPONSIBILITY LAW
(PMVFRL)
by Jonathan Cass, Esq.
APPENDIX
- Pennsylvania Motor Vehicle Insurance Act and Amendments
(75
Pa.C.S.A. §1701, et seq.)
- Opinion of Washington v. Baxter,
719 A.2d 733 (Pa. 1998)
- Administrative Regulations re:
Automobile Insurance Medical Cost Containment (31 Pa. Code §§69.1-69.55)
TABLE
OF CONTENTS
I.
INTRODUCTION
A.
Background
B. Purpose
Of 1990 Amendments
C. Selected
Definitions Under PMVFRL (75 Pa.C.S.A. §1702)
II.
TORT OPTIONS
A. Selection
of Options
B. Full
Tort Option
C. Limited
Tort Option
D. Application
of Tort Options
E. Statute
of Limitations Applicable to Tort Statute
III.
FIRST PARTY BENEFITS
A. Mandatory
Coverages
B. Optional
Coverages
C. Ineligible/Excluded
Claimants
D. “Occupancy”
of Vehicle Defined
E. Priorities
of First Party Coverage
F. Subrogation
G. Prohibition
Against Stacking
H. Coordination
of Benefits (Who Pays First)
I. Preclusion
of Evidence
IV.
PAYMENT OF FIRST PARTY BENEFITS
A. Generally
B. Peer
Review
C. Attorney’s
Fees & Limits on Contingency Fees
D. Medical
Examinations
E. Statute
of Limitations
V.
UNINSURED/UNDERINSURED MOTORIST COVERAGE
A. Eligibility
to Collect UM/UIM Benefits
B. Required
Coverage
C. Amount
of Coverage
D. Priority
of Recovery When Multiple Polices Are Applicable
E. Stacking
F. Coordination
of Coverages
G. Set-Off
of Amounts Recovered from Tortfeasor
H. “Consent
To Settle” Clauses in UIM Endorsements
I. Exhaustion
of Coverage Clauses in UIM Endorsements
J. Various
Exclusions In UM/UIM Endorsements
K. Application
of Limited Tort Selection to UM/UIM Claims
L. Workers’
Compensation and UM/UIM Benefits
M. Statute
of Limitations
I)
INTRODUCTION
A)
Background
1)
In 1984, the
legislature enacted the Pennsylvania Motor Vehicle Financial Responsibility Law
(“PMVFRL”), 75 Pa.C.S.A. §1701, et seq. The law substantially changed the Commonwealth's first No-Fault
Law. In 1990, the legislature enacted a
series of amendments that again substantially changed the applicable
statute. The most significant change
was the establishment of a “limited tort” option by which an insured gave up
the right to sue for non-economic damages (i.e., pain and suffering) in
exchange for a premium reduction, reduced first party benefits and the option
to waive uninsured (UM) and underinsured (UIM) coverage, and stacking of UM and
UIM coverage. The amendments became effective as of July 1, 1990. The original act and the amendments Acts
must be read together. (The complete text of the statute and amendments is set
forth at Appendix “A”).
B)
Purpose Of 1990
Amendments
1)
Attempt to create a
saving on premiums by giving the insurance consumer a choice:
(a)
an insured can give
up his/her right to sue for non-economic loss in exchange for a 22% savings on
premium. This option is keyed to
"private passenger motor vehicles" which excludes rental and
commercial vehicles.
(b)
even if the insured
does not give up the right to sue for non-economic loss, he/she is to save 10%.
(c)
the savings are based
on rates in effect as of 12/1/89.
C)
Selected
Definitions Under PMVFRL (75
Pa.C.S.A. §1702)
1)
“Financial
responsibility”
(a)
the ability to
respond in damages for liability on account of accidents arising out of the
maintenance or use of a motor vehicle in the amount of $15,000 because of the
injury to one person in any one accident, in the amount of $30,000 because of
injury to two or more persons in any one accident and in the amount of $5,000
because of damage to property of others in any one accident.
2)
“Injury”
(a)
accidentally
sustained bodily harm to an individual and that individual’s illness, disease
or death resulting therefrom.
3)
“Insured”
(a)
Any of the following:
(1)an
individual identified by name as an insured in a policy of motor vehicle
liability insurance;
(a)an
individual listed only in the “named drivers” section of the policy does not
qualify as a “named insured.” Stump v. State Farm, 564 A.2d 194 (Pa.
Super. 1989)
(2)if
residing in the household of the named insured:
(a)a
spouse or other relative of the named insured
(b)a
minor in the custody of either the named insured or a relative of the named
insured;
4)
"Necessary
medical treatment and rehabilitative services"
(a)
treatment,
accommodations, products or services which are determined to be necessary by a
licensed health care provider unless they shall have been found or determined
to be unnecessary by a State‑approved Peer Review Organization (PRO).
5)
“Non-economic
loss”
(a)
pain and suffering
and other non-monetary detriment.
6)
“Private passenger
motor vehicle”
(a)
a four‑wheel
motor vehicle, except recreational vehicles not intended for highway use, which
is insured by a natural person and:
(1)is
a passenger car neither used as a public or livery conveyance nor rented to
others; or
(2)has
a gross weight not exceeding 9,000 pounds and is not principally used for
commercial purposes other than farming.
(b)
the term does not
include any motor vehicle insured exclusively under a policy covering garage,
automobile sales agency repair shop, service station or public parking place
operation hazards.
7)
“Serious injury”
(a)
a personal injury
resulting in death, serious impairment of body function or permanent serious
disfigurement.
8)
“Underinsured
motor vehicle” (UIM)
(a)
a motor vehicle for
which the limits of available liability insurance and self‑insurance are
insufficient to pay losses and damages.
9)
"Uninsured
motor vehicle" (UM)
(a)
Any of the following:
(1)a
motor vehicle for which there is no liability insurance or self‑
insurance applicable at the time of the accident;
(2)a
motor vehicle for which the insurance company denies coverage or the insurance
company is or becomes involved in insolvency proceedings in any jurisdiction;
(3)an
unidentified motor vehicle that causes an accident resulting in injury provided
the accident is reported to the police or proper governmental authority and the
claimant notifies his insurer within 30 days, or as soon as practicable
thereafter, that the claimant or his legal representative has a legal action
arising out of the accident.
BACK TO TOP
II)
TORT OPTIONS
A)
Selection of
Options
1)
Two Tort Options- for all policies issued or renewed on or after
July 1, 1990, insurers must advise each named insured of the two tort options
available under the Pennsylvania Motor Vehicle Financial Responsibility Law
(“PMVFRL”). 75 Pa.C.S.A. §1705(a)(1)
2)
Selection- any named insured may make the tort
election. An election binds all other
named insureds and insureds.
§1705(a)(2)
(a)
once the named
insured makes the tort election in writing, all named insureds and all insureds
are barred from claiming liability based on being inadequately informed.
§1705(a)(2)
B)
Full Tort
Option
1)
Generally- a claimant who is deemed “full tort” can seek
recovery for all unreimbursed economic and non-economic (pain and suffering)
losses arising out of an automobile accident.
§1705(c)
(a)
NJ Exception- if an
accident occurs in NJ and claimant’s PMVFRL insurer does business in NJ, then
the NJ “verbal threshold” (similar to
PA’s “limited tort threshold”) applies, regardless of any full tort
selection on the PMVFRL policy. Dyszel
v. Marks, 6 F.3d 116 (3d. Cir. 1993); Whitaker v. DeVilla, 147 N.J.
341 (1997)
2)
Individual is
considered full tort if:
(a)
considered an insured
under a policy of insurance for which the full tort option has been selected;
or
(b)
is not the owner of a
currently registered private passenger motor vehicle. §1705(b)(3)
C)
Limited Tort
Option
1)
Generally– unless a claimant falls within one or more of
seven exceptions, a claimant may seek recovery only for unreimbursed economic
loss arising out of an automobile accident.
§1705(d)
2)
Exceptions
(a)
if the tortfeasor is
a convicted or ARD drunk driver;
§1705(d)(1)(i)
(b)
if the tortfeasor is
operating a motor vehicle registered out-of-state; §1705(d)(1)(ii)
(c)
if the tortfeasor
intended to injure himself or another;
§1705(d)(1)(iii)
(d)
if the tortfeasor is
uninsured; §1705(d)(1)(iv)
NOTE: the above four exceptions
do not apply to any resulting UM/UIM claim. Rump v. Aetna Casualty,
678 A.2d 1197 (Pa. Super. 1996); §1731(d)
(e)
if recovery is sought
against a person in the business of designing, manufacturing, repairing,
servicing, or maintaining vehicles for acts or omissions arising of out such a
business, other than a defect in a motor vehicle which is operated by such
business; §1705(d)(2)
(f)
if claimant is an
occupant of a motor vehicle other than a private passenger motor vehicle; §1705(d)(3)
(g)
if claimant suffers a
personal injury resulting in death, serious impairment of a body function, or
permanent serious disfigurement.
§1705(d)
3)
Role of Fact
Finder
(a)
Whether claimant has
sustained a “serious injury” is determined in all but the clearest cases by the
fact finder (i.e. the jury). Washington
v. Baxter, 719 A.2d 733 (Pa. 1998) (A copy of the Washington opinion
is attached as Appendix “B”).
(b)
The fact finder is to
evaluate two issues:
(1)what
body function, if any, was impaired; and
(2)was
the impairment of the body function serious?
(c)
the focus of this
inquiry is not on the injuries but rather on how the injuries affected a
particular body function (a topic generally requiring medical evidence). In determining whether an impairment is
serious, the fact finder should consider:
(1)the
extent of the impairment;
(2)the
length of time the impairment lasted;
(3)the
treatment required to correct the impairment; and
(4)“any
other relevant factors.”
(d)
the impairment need
not be permanent to be “serious.”
4)
Effect of
Washington on Summary Judgement
(a)
summary judgment for
defendants is still possible and was affirmed in Washington, supra,
but will only be granted in the “clearest cases.”
(b)
summary judgment
affirmed where there had been no treatment for five year period prior to the
motion and no absence from employment (although claimant had changed
occupations from plumber to electrician).
McGee v. Muldowney, 750 A.2d 912 (Pa. Super. 2000)
5)
Specific Types of
Injuries
(a)
soft tissue injuries
can constitute a “serious injury.” Chanthavong v. Tran, 682 A.2d 334
(Pa. Super. 1996)
(b)
mental disorders or
psychiatric problems can constitute a “serious injury” with proper proof. Hames v. PHA, 696 A.2d 880 (Pa.
Commw. 1997)
(c)
facial laceration
visible three and one-half years after accident, and unanimous medical expert
opinion that scarring most likely permanent considered serious permanent
disfigurement. Gemmell v. Barrett,
35 Pa. D. & C.4th 38 (Indiana Co. 1997)
(d)
when determining
whether serious permanent disfigurement exists, focus is on: (1) how noticeable
is the scarring after there has been a period of healing as opposed to what the
injury may have looked like shortly after the accident; (2) is there medical
evidence that opines that the scarring is permanent. Walsh v. Phillips, 38 Pa. D. & C.4th 178 (Bucks Co.
1997)
6)
Review of
Post-Washington Case Law
(a)
summary judgment
granted by trial court prior to Washington, supra, reversed where
evidence showed that plaintiff had missed six weeks of work, sustained
herniated disc with lumbar radiculopathy, continued to have pain and numbness
and gave up some hobbies and limited others.
Hellings v. Bowman, 744 A.2d 274 (Pa. Super. 1999)
(b)
summary judgment
granted where: plaintiff diagnosed with cervical strain and sprain, trapezius
myofascitis, post traumatic headaches, contusion to finger and knee and
underwent physical therapy, arthroscopic knee surgery. Six (6) months post-accident condition
greatly improved and no longer taking pain medication, but still had pain in
knee after walking long periods of time and at night. Piwonski v. Choe, 38 Pa. D. & C.4th 449 (Bucks Co.
1999) summary judgment granted where: missed four weeks of work, one year
post-accident plaintiff still complaining of ringing in ears at least once a
week, headaches as least three times per week, back pain from bulging disc
requiring four months of physical therapy.
Plaintiff still able to exercise at gym three times a week. Atkinson
v. Snyder, 41 Pa. D. & C.4th 1 (Bucks Co. 1999)
(c)
summary judgment
granted where accident-related injuries necessitated only limited medical
treatment and caused plaintiff to miss only a few days of work. Sekol v. Albrecht, 51 Pa. D. &
C.4th 235 (Lackawanna Co. 2001)
(d)
no summary judgment
where plaintiff diagnosed with bulging disc and three years after accident,
plaintiff still unable to walk more than a block at a time, cannot lift heavy
objects and had to reduce employment status from full time to part time. Furman
v. Shapiro, 721 A.2d 1125 (Pa. Super. 1998)
(e)
summary judgment
reversed where plaintiff diagnosed with herniated disc, lumbar radiculopathy,
underwent physical therapy, missed six months of work, had lingering numbness,
continued pain, could no longer ride in car without pain and had some hobbies
eliminated and others limited. Hellings v. Bowman, 744 A.2d 274 (Pa.
Super. 1999)
(f)
no summary judgment:
plaintiff was taken to the emergency room after the accident, had been treated
with physical therapy following the accident,
continued to complain of soreness in her neck, back and knee, was only
able to work a limited schedule due to her injuries. McHale v. Wuagon,
50 Pa. D. & C.4th 444 (Lackawanna Co. 2000)
7)
Application to
Pedestrians
(a)
Trial courts have
split on issue of whether a pedestrian is bound by limited tort election of a
family member.
(1)not
bound by limited tort selection:
(a)a
pedestrian struck by a motor vehicle was not bound by his father’s selection of
the limited tort option despite the fact that the pedestrian was an insured
under his father’s policy. Andreyo
v. Radle, PICS Case No. 02-0691(Daupin County, April 1, 2002)
(2)bound
by limited tort selection
(a)limited
tort election of plaintiff’s husband applied to pedestrian-wife. Eckler v.
Watson, No. 1999-2074 C.P. (Mercer County, April 11, 2001)
(b)claimant
struck by a vehicle while directing traffic at a construction site was bound by
election of limited tort option. Spearman
v. Rabe, 146 P.L.J. 111 (Pa. Com. Pl. 1998; affirmed 724 A.2d 969 (Pa.
Super. 1998)
D)
Application of Tort
Options
1)
Deemed Full Tort– a person who neither owns a currently registered
private passenger motor vehicle nor
qualifies as an insured under a private passenger motor vehicle is deemed to
have “full tort” rights. §1705(b)(3)
2)
Deemed Limited
Tort- owner of uninsured vehicle:
an owner of a currently registered private passenger motor vehicle without
financial responsibility (i.e, without the minimum insurance coverage required
under the PMVFRL) is deemed to have selected the “limited tort” option.
§1705(a)(3)
(a)
the “deemed limited
tort” status extends to all relatives resident in the household. Hames v. PHA, 696 A.2d 880 (Pa.
Commw. 1997)
(1)But see: Ickes
v. Burkes, 713 A.2d 653 (Pa. Super. 1998) (holding that the wife who was a
passenger in her husband’s automobile which was registered but not insured not
deemed limited tort).
(b)
But, if the owner of
a currently registered private passenger motor vehicle qualified for full tort
status as an “insured” under a policy and if the owner is not occupying the
uninsured vehicle at the time of the accident, the owner is considered full
tort. Berger v. Rinaldi, 651
A.2d 553 (Pa. Super. 1994)
3)
Priority When
Multiple Tort Elections- an
insured under a policy is bound by the tort election applicable to the policy
unless that individual is a named insured on another policy. If a named insured on another policy, the
tort election on the named insured policy will control. §1705(b)(2), Hobbs v. Ryce, 769 A.2d
469 (Pa. Super. 2001)
(a)
if a person qualifies
as an insured under two or more policies with conflicting tort option
elections, the tort election on the policy covering the motor vehicle involved
in the accident controls. If no vehicle
insured under the conflicting policies is involved in the accident, the “full
tort” option applies. §1705(b)(2)
4)
Effect of Election– once a named insured has elected a tort option,
that option remains in effect until the insurer received a properly executed
option form changing the election.
§1705(b)(1)
E)
Statute of
Limitations Applicable to Tort Statute
1)
the statute of
limitations on claims for non-economic damages for a limited tort claimant does
not start to run until the claimant knows or has reason to know that any
injuries from the accident constitute a “serious injury.” Walls v. Scheckler, 700 A.2d 532 (Pa.
Super. 1997)
BACK TO TOP
III)
FIRST PARTY
BENEFITS
A)
Mandatory
Coverages
1)
Generally- the coverage requirements of the PMVFRL apply to
liability policies covering motor vehicles (except certain recreational
vehicles and motorcycle-type vehicles) registered and operated in the
Commonwealth.
2)
$5,000.00 in
required medical benefits.
(a)
for payment of reasonable
and necessary medical treatment without limitation as to time, provided that
within 18 months from the accident it is ascertainable with reasonable medical
probability that further expenses might. §§1711(a), 1712(1)
3)
no required work loss benefits. §1711(a)
B)
Optional
Coverages
1)
the carrier must
offer at least the following optional coverages for purchase:
(a)
Additional medical
benefits up to $100,000.00. §1715(a)(1)
(b)
Extraordinary medical
benefits from $100,000.00 to $1,100,000.00
which may be offered in increments of $100,000. §1715(a)(1.1)
(1)except
for the first 18 months after an accident (when no annual limit applies), this
coverage is subject to a $50,000 per year cap. §§1712(b), 1715(a)(1.1), 1715(d)
(c)
Income loss benefits
up to $50,000 ($2,500.00 per month maximum). §§1715(a)(2), 1712(2)
(1)80%
of actual loss of gross income
(2)reasonable
expenses incurred to hire replacements to peform self-employment services
(3)reasonable
expenses incurred for “special help” enabling the claimant to work.
(4)limitations
on income loss benefits
(a)does
not cover post-mortem work loss;
(b)a
5 day deductible applies to any work loss claim
(5)relevant
case law
(a)lack
of employment at the time of the accident does not bar recovery. “Actual loss of gross income” can be
established by showing that the claimant would have worked and earned income
but for the accident. Persik v. Nationwide Ins. Co., 554 A.2d 930 (Pa.
Super. 1989)
(b)where
claimant has received workers’ compensation benefits, the PMVFRL wage benefit
is 80% of the wage loss after it has been reduced by the workers’
compensation payment. Danko v. Erie Ins. Exchange, 630 A.2d 1219 (Pa.
Super. 1993)
(c)“actual
loss of gross income” is not reduced by sick pay or social security benefits
received by a claimant. Panichelli v. Liberty Mutual Ins. Co., 669 A.2d
930 (Pa. Super. 1996)
(d)the
definition of “month” when calculating the maximum benefit for wage loss means
the period of time beginning with a date in one calender month and ending with
the corresponding date in the next calender month (i.e., June 15 to July
15). Tyler v. Motorists Mutual,
779 A.2d 528 (Pa. Super. 2001)
(d)
Accidental death
benefits to at least $25,000.00
§1715(a)(3)
(1)death
must occur within 24 months of accident
(2)benefits
is payable to personal representative of estate
(e)
Funeral benefits up
to $2,500.00 provided that death due to accident occurs within 24 months of the
accident. §§1715(a)(4), 1712(4)
(f)
Combined benefit of
$177,500.00 (with individual limits of $25,000 on any accidental death benefit
and $2,500 in funeral benefits) subject to a 3 year limitation period.
(1)total
benefits limited to:
(a)aggregate
limit shown on declaration sheet, or;
(b)three
years from date of accident; whichever occurs first. §1715(a)(5)
C)
Ineligible/Excluded
Claimants
1)
Individuals
ineligible to receive first party benefits:
(
