What to do about increasing car insurance rates

In the last year, auto insurance rates in Pennsylvania have increased in double digits. Before I get into ways to lower your rates, understanding what coverages you must carry and what are optional should be addressed.

Automobile insurance is regulated by each individual state. If you reside in Pennsylvania, your automobile should be registered in Pennsylvania and you must have valid insurance. When traveling outside of Pennsylvania, other states accept your Pennsylvania insurance so you can travel at will.

Pennsylvania requires all registered vehicles to have liability insurance. Liability insurance reimburses individuals for injuries or damage you may cause by operating your automobile. The minimum liability insurance you must have is 15/30/5. The 15 is $15,000 of coverage if you injure one person. The 30 is $30,000 of coverage if you injure more than one person, and the 5 represents $5,000 in property damage.

Pennsylvania law also requires your auto insurance policy to provide $5,000 in medical coverage. No matter who is responsible for an accident, the first $5,000 in medical bills will be paid by the automobile insurance policy of the person injured. If you do not own a vehicle, then the first $5,000 in medical bills will be paid by the insurance policy of the vehicle in which you are riding or a policy issued to a family member of the household in which you reside.

"Limited tort" option – The laws of the commonwealth of Pennsylvania give you the right to choose a form of insurance that limits your right and the rights of members of your household to seek financial compensation for injuries caused by other drivers. Under this form of insurance, you and other household members covered under this policy may seek recovery for all medical and other out-of-pocket expenses, but not for pain and suffering or other nonmonetary damages unless the injuries suffered fall within the definition of "serious injury," as set forth in the policy or unless one of several other exceptions noted in the policy applies.

"Full tort" option – Pennsylvania laws also give you the right to choose a form of insurance under which you maintain an unrestricted right for you and the members of your household to seek financial compensation for injuries caused by other drivers. Under this form of insurance, you and other household members covered under this policy may seek recovery for all medical and other out-of-pocket expenses and may seek financial compensation for pain and suffering and other nonmonetary damages as a result of injuries caused by other drivers.

Choosing limited or full tort will result in premium differences and should be discussed with your insurance agent.

Pennsylvania's laws apply to all registered vehicles. If you own a motorized vehicle and drive it off of your property, it may need to be registered and insured.

This is the first of three parts. Upcoming columns will discuss optional coverages and how you should decide what limits and deductibles are best for you.