Minimum Insurance Coverage

In 1974, the average home cost $34,900, the average rent was $185, gasoline was .55¢ per gallon and the average new car cost $3,750. This was the year Richard Nixon resigned the presidency in the midst of the Watergate Scandal and was later pardoned by his successor, Gerald Ford. A 55 mile per hour speed limit was imposed throughout the country to preserve gas and the Sears Tower in Chicago became the world’s tallest building. This was also the year that legislation was passed in Pennsylvania to establish minimum motor vehicle insurance limits of $15,000 for an injured person and $5,000 for property damage. In other words, if you suffer an injury as a result of the negligence of a driver carrying the legal minimum insurance coverage, the most that you could recover from the insurance carrier is $15,000 for your injuries and $5,000 for damage to your car. Thirty seven years have passed and, as we enter 2011, the average cost of a home is $213,000, the average price of a car is $28,400, the average rent is $545, a gallon of gasoline is $3.15, yet Pennsylvania has never raised the minimum insurance coverage! We need to catch up with modern times and the rest of the nation.

The problem is obvious. The $5,000 property damage minimum may cover the damage in a mere fender bender but the cost to repair or replace a new vehicle will almost always exceed that amount. As for medical and related expenses incurred by a person injured in a motor vehicle collision, the sum of $15,000 cannot begin to compensate a seriously injured person who incurs always rising medical expenses, wage loss and other similar losses.

It is obvious that when a person sustains a catastrophic injury and the responsible party has the legal minimum coverage, the injured person will not be fairly compensated for his or her loses. In many cases, it will be the taxpayers that ultimately “foot the bill” for the required medical care through Medicare or Medicaid. In order to alleviate these problems, Pennsylvania Senate Bill No. 1460 has been introduced. This Bill would raise the minimum insurance limits from $15,000 to $30,000 for one person and from $30,000 to $60,000 for multiple persons injured in the same automobile collision. It will also raise the property damage limit from $5,000 to $10,000. These are modest increases, but even they are long overdue.

Unfortunately, like so many pieces of legislation in Pennsylvania, it remains “caught in Committee”. I am not certain what “caught in Committee” means, but it is obvious that once legislation gets “caught” it rarely, if ever, gets “released”.

With one party now controlling the House of Representatives, Senate and Executive (Governor), the bipartisan bickering is no longer an excuse for continued legislative inaction. The Pennsylvania legislative process is the most expensive in the nation in cost to the public. Despite this, there always seems to be an impasse as legislation remains “caught in Committee” and is never voted on. Could it be the Legislators do not want to be faced with the responsibility of voting? Could it be it is about one party winning and one party losing and the interest of the public gets lost in the contest? Could it be that “caught in Committee” is merely an excuse for inaction?

The main duty of elected Legislators is to serve the public and not to serve a particular political party by engaging in political gamesmanship. Although it is already long overdue, the time has come for the Legislators to pass Senate Bill No. 1460 which will unquestionably benefit all consumers. If the Legislators are unwilling to take this action, they should explain why the interest of the insurance companies are more important to them than the protection of their constituents.

James T. Davis, Esquire
jdavis@davisanddavislaw.com