What is Limited Tort and Full Tort

What are “Limited Tort” and “Full Tort”?

Why are they relevant to my case?

Back in 1990, some were claiming that the automobile insurance rates were too high in Pennsylvania. So the State Legislature decided that Pennsylvania would adopt Michigan’s motor vehicle insurance law, which holds that all automobile insurance companies must offer as an alternative to the standard insurance policy a discounted policy whereby the policyholder must in return agree to give up his or her right to bring a personal injury claim (non-economic claim).

By accepting the discounted premium on the policy, the policyholder is essentially getting paid to give up his or her right to bring a personal injury claim if they are harmed in a motor vehicle collision by a negligent driver. The payment to the policyholder in return for the policyholder giving up his or her rights makes it a binding contract. The traditional standard policy which has no limitations on a policyholder’s rights is called a “Full Tort” policy. The discounted automobile insurance policy, whereby the policyholder has given up (waived) his or her right to bring a personal injury claim is called a “Limited Tort” policy.

Many people do not know whether they are bound by a Limited Tort policy or a Full Tort policy for several reasons.

  1. First, when the policyholder initially purchases the automobile insurance policy, normally at the time the policyholder first purchases the vehicle, the policyholder will select at that time whether he or she wants the Limited or Full Tort policy. Thereafter, the policyholder’s tort selection renews automatically each year along with the rest of the policy, unless the policyholder affirmatively advises the insurance company that he or she wants to change their tort selection. Thus, years often go by between the date when the policyholder initially made his or her tort selection and the date when they are injured in a motor vehicle collision and they don’t remember which tort selection they made years earlier which is still binding on them on the date of the collision.
  2. A second reason and more disturbing reason why many people do not know whether they are bound by a Limited Tort policy or a Full Tort policy is because they were never involved in the tort selection in the first place. Pennsylvania law states that the policyholder’s selection of Limited Tort or Full Tort is binding on all other “named insureds” (usually the spouse) and “insureds” (household relatives) on the policy, as long as they don’t have their own policy of automobile insurance. In layman’s terms, if Dad purchases a car and selects an automobile insurance policy with Limited Tort, then his wife (named insured as his spouse) and their 3 children living in the house (insureds as household relatives) are all bound by his Limited Tort selection, assuming his wife and kids don’t own their own car with their own policy of insurance. In this frequent scenario, the wife and the kids had no involvement in the tort selection on the policy, yet their rights have been contracted away by the Dad’s selection of Limited Tort. As with this example, when the amount of the monetary discount from the Limited Tort auto insurance policy is divided by the total number of family members affected, most policyholders will realize that the discount is not worth the rights that must be given up.

    A second example which is common is an unmarried couple living together. The girlfriend owns a car and has selected Limited Tort. The boyfriend doesn’t own a car, and therefore, retains the Full Tort rights he was born with, as he does not have a need to have his own policy of automobile insurance and is not a “named insured” (spouse of policyholder) on any auto policy and he is not an “insured” (household relative of policyholder) on any automobile insurance policy. They then get married. His wedding present from the insurance industry is that he has now automatically lost his Full Tort rights and is now bound by his wife’s Limited Tort selection on her automobile insurance policy, as he is now her spouse and a spouse (living together in the same household) is automatically listed as a named insured on automobile insurance policies in Pennsylvania. So once they are married, he is now automatically a named insured on his wife’s policy and is bound by her tort selection, assuming he doesn’t own his own vehicle with his own policy of automobile insurance. Of course, in most situations, he will not even be aware of the fact that he has lost his rights until after a motor vehicle collision, when it is too late.

    In the first example above, it should also be noted that the three children in the family of five will be bound by limited tort regardless of their age or whether they have a driver’s license or not. The law only requires that you be a named insured or an insured under the policy. Thus, since all household relatives are insureds, they are bound by a limited tort selection regardless of how young they are or if they even possess a driver’s license.
  3. Another misconception is that if someone else negligently caused the collision that the negligent driver’s tort selection determines whether you can bring a personal injury claim. This is false. The negligent driver’s tort selection has nothing to do with whether you contracted away your rights, your spouse’s rights or your household relative’s rights by getting paid a discount on your automobile insurance policy. The negligent driver’s tort selection only affects his own rights and the rights of his or her spouse and household relatives covered under the negligent driver’s policy of insurance.
  4. Also, your tort selection follows you wherever you go. It does not just apply to when you are an occupant of your own insured vehicle, but applies whenever you are in any private passenger motor vehicle that is involved in a collision in Pennsylvania. Furthermore, the law in Pennsylvania is that if you own a motor vehicle, you must have it insured. If the owner fails to insure his or her motor vehicle, then they are automatically deemed by the law to be bound by the restrictions of Limited Tort.
  5. Finally, it should be remembered that the Limited Tort restrictions only apply to non-economic damages, i.e. to personal injuries. The Limited Tort restriction does not apply to economic damages such as property damage, excess medical bills and lost wages. An injured individual that is bound by the Limited Tort restriction can still bring a claim against the negligent driver for payment of property damage to their vehicle, for lost wages and for any excess unpaid medical bills that still remain after the injured individual’s own automobile insurance policy limit for payment of medical bills is exhausted.

To discuss your circumstances, contact a Philadelphia personal injury lawyer from the Law Offices of Thomas J. Murphy, Jr today!