OAI: Court Case Highlights Stakes of Penn. Drivers' Auto Insurance Choices

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Consumers should seriously consider the possible repercussions of rejecting UM/UIM coverage, according to Online Auto Insurance.

A recent opinion in which Pennsylvania’s second highest court ruled that one of the state’s car insurers invalidated its own uninsured/underinsured motorist (UM/UIM) coverage rejection form because it inserted additional language highlights an important decision Pennsylvania motorists must make when purchasing a policy, according to Online Auto Insurance.

Pennsylvania drivers are required to buy liability and medical payments insurance before getting behind the wheel, but policies also by default include UM/UIM coverage unless the purchaser rejects it in writing.

UM/UIM is a relatively cheap insurance add-on that covers bodily injury damages inflicted upon the policyholder and any of the policyholder’s family or passengers when the driver who caused the crash was uninsured, underinsured or unidentified.

According to the latest data from the National Association of Insurance Commissioners, the average premium for UM/UIM coverage in Pennsylvania was $97 in 2008.

Nearly all drivers in the state opt to retain the coverage—for every 100 policies purchased in Pennsylvania in 2008, about 99 included UM/UIM coverage—and new policyholders will have to make the decision for themselves.

But for those thinking of rejecting the policy, consider the case of Lee Jones.

According to court documents from Lee Jones v. Unitrin Auto and Home Insurance Company, Jones had rejected UM/UIM coverage when buying her policy, and ended up being injured in a crash caused by an underinsured driver.

Jones’s damages exceeded the limits of the at-fault driver’s coverage, and her insurer likely would have paid for the remaining damages if she had opted to retain UM/UIM. But since she rejected it, she faced paying for the damages out of pocket after her insurer denied her benefits.

Ultimately, though, the state Superior Court ruled that her insurer had voided the rejection form by adding a sentence to the rejection statement that she signed, and her claim may end up getting paid. (The rejection form is supposed to be identical to what is mandated under state law.)

Source: http://www.pacourts.us/OpPosting/Superior/out/A34022_11.pdf

But even though Jones may have her injuries covered, she could have saved much time and trouble by simply paying a little extra premium for the extra coverage. And other Pennsylvanians shopping for a policy should take into serious consideration whether they want to risk not being covered by UM/UIM.

For more about this and other coverage issues, visit http://www.onlineautoinsurance.com/cheap/ to get access to informative resources and a quote-comparison generator that can help consumers find the best rates for a policy.

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Benjamin Zitney
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