1. Forms
2. PP
3. PP-01-70

Form PP 01 70: Pennsylvania Auto Insurance Law Changes

1. What the form is

Form PP 01 70, titled "Pennsylvania Auto Insurance Law Changes," is an endorsement that modifies the standard Personal Auto Policy (such as form PP 00 01) to ensure compliance with specific Pennsylvania auto insurance laws. Its primary function is to incorporate state-mandated provisions, most notably those related to tort options (Full Tort or Limited Tort), into the auto insurance contract. Pennsylvania law requires drivers to choose between these tort options, which significantly impacts their ability to sue for non-economic damages (like pain and suffering) after an accident. This form ensures the policy accurately reflects the insured's choice and adheres to the Pennsylvania Motor Vehicle Financial Responsibility Law.

2. Classes of business it applies to

This endorsement applies exclusively to Personal Auto Policies issued in Pennsylvania. It is relevant for any individual purchasing or renewing a personal auto insurance policy for their private passenger vehicles in the state. This includes:

• Individual car owners.
• Families with multiple vehicles.
• Insureds who lease their vehicles for personal use (typically for continuous periods of at least 6 months, as a private passenger auto is often defined to include such leased vehicles).

3. Special considerations

Several special considerations are crucial when dealing with Form PP 01 70:

• Tort Selection is Mandatory: Pennsylvania is a "choice no-fault" state, meaning insureds must select either a "Full Tort" or "Limited Tort" option. This choice is a significant aspect of the policy and is documented via this endorsement or a similar form.
  • Full Tort: Allows the insured and eligible family members to sue the at-fault party for all damages, including economic (medical bills, lost wages) and non-economic (pain and suffering) losses, regardless of the severity of the injury. This option typically comes with a higher premium.
  • Limited Tort: Restricts the insured's right to sue for non-economic damages unless the injuries are considered "serious" (defined as death, serious impairment of body function, or permanent serious disfigurement) or specific exceptions apply. Exceptions where a limited tort insured can still sue for non-economic damages include accidents caused by a driver convicted of DUI, an out-of-state vehicle, an uninsured driver, or if the insured was occupying a commercial vehicle. This option generally has a lower premium.
• Impact on Uninsured/Underinsured Motorist (UM/UIM) Coverage: The tort selection can also influence how UM/UIM coverage applies, particularly concerning the recovery of non-economic damages.
• Statutory Requirements: The form ensures the policy aligns with Pennsylvania's Motor Vehicle Financial Responsibility Law, which dictates minimum liability coverage amounts (e.g., $15,000 for injury to one person, $30,000 total for injuries per accident, and $5,000 for property damage, though these minimums have been subject to proposed increases).
• Policy Language Prevails: The terms and conditions outlined in this endorsement, once attached to the PP 00 01, supersede any conflicting general provisions in the base policy to the extent of the modification.
• Non-Duplication of Benefits: The form typically includes provisions to prevent duplicate payments for the same elements of loss under different parts of the policy or other insurance.

Real-world example: An individual in Pennsylvania choosing the Limited Tort option to save on their auto insurance premium is involved in an accident caused by another driver. They suffer minor whiplash. Due to their Limited Tort selection, as reflected by an endorsement like PP 01 70, they can recover their medical expenses and lost wages from their own policy's First Party Benefits and from the at-fault driver, but they generally cannot sue the at-fault driver for pain and suffering associated with the whiplash unless it meets the "serious injury" threshold or another exception applies. If they had chosen Full Tort, they could have pursued a claim for pain and suffering regardless of the injury's severity.

4. Key information for agents and underwriters

• Clear Explanation to Insureds: Agents must clearly explain the significant differences between Full Tort and Limited Tort options, including the potential impact on an insured's ability to recover damages. This is a critical part of the sales and advisory process.
• Pricing Impact: The tort selection directly affects the policy premium. Full Tort is more expensive due to the broader right to sue. Underwriters will factor this choice into the overall rating of the policy.
• Risk Assessment: While the tort selection itself is a legal right of the insured, underwriters may consider it within the broader context of the risk profile. However, the primary underwriting focus remains on driving record, vehicle type, usage, etc.
• Documentation is Key: Ensuring the insured's tort selection is properly documented (usually via a signed form acknowledging the choice) is crucial to prevent errors and omissions claims against the agent or insurer. The PP 01 70 serves to formally integrate this choice into the policy.
• Coverage Gaps Awareness: Agents should ensure clients understand potential coverage gaps, especially if they opt for Limited Tort and minimum liability limits. Discussing the benefits of higher liability limits and UM/UIM coverage is essential.
• Compliance: This endorsement is vital for regulatory compliance in Pennsylvania. Underwriters must ensure it is correctly applied to all applicable personal auto policies issued in the state.
• Relation to PP 00 01: The PP 01 70 is not a standalone policy; it amends the base Personal Auto Policy (PP 00 01). Underwriters need to understand how its provisions interact with and modify the standard policy language. For instance, definitions like "serious injury," "economic loss," and "non-economic loss" provided in or referenced by the endorsement become integral to the policy.