Understanding Car Insurance – Volume 4 How First-Party Benefits Work

How well do you understand the car insurance you rely on to protect you and your family? This is the fourth in a series of articles aimed at helping you determine whether you’re really protected by your insurance policy.

Does it matter who was at fault in a car accident, particularly if someone is hurt?

Of course it does.

Assigning blame has a huge impact on whether you can be fairly and adequately compensated for your loss after the accident.

At the same time, it is important to grasp the concept of “no fault” automobile insurance and what it means for you and your family.

Pennsylvania is one of a dozen states with no-fault insurance laws on the books. This means if you’ve been hurt in a car accident, you must first file your claim with your own insurance company, even if the other driver was the one who caused the accident.

When you purchase car insurance, state law requires you to carry a minimum of $5,000 in what are called first-party benefits for medical payments. That’s $5,000 in coverage for you and $5,000 for anyone else covered by the policy and injured in the accident.

First-party medical benefits (sometimes called personal injury protection or “PIP” benefits) pay for healthcare expenses that are a result of the accident up to the limits you purchase. You have the option to purchase increased first-party medical benefits (up to $100,000) to cover medical expenses, but the $5,000 minimum coverage applies to every policy.

There are other types of optional first-party benefits that can offer substantial benefit to you if you’re hurt.

Among them is what is called work loss coverage.

If you opt to purchase this coverage, it kicks in if you cannot work for a span of time as a result of the accident, thereby providing monetary compensation to substitute for lost income. Depending upon the policy you choose, work loss coverage and short-term disability coverage through your employer can potentially combine to replace 100 percent of your salary for a period of time.

Ask your insurance company about the options available to you for first-party benefits and whether you should consider a higher level of coverage. It can make a huge difference at a time when you might otherwise feel powerless as you face a potential financial crisis.

If you’ve been injured in a car accident, contact Jack Goodrich and Associates to discuss your case. We are a nationally recognized personal injury law firm and offer a no-cost initial personal consultation. Call 412-261-GOOD (412-261-4663).

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