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.
- 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.
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.
- 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.
- 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.
- 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!