Personal Automobile Policy (Outline: 6.0 Personal Automobile Policy ('05) - 10%)

"Typical" means how the standard industry personal auto policy usually reads. Insurers file their own wording, so a figure labeled typical is a teaching baseline and no question in this book depends on one. The book describes coverage and never reproduces form text. The Pennsylvania law below was read in the statute itself: all of 75 Pa.C.S. Chapter 17 as printed on palegis.us, Article XX of the Insurance Company Law of 1921, 31 Pa. Code Chapter 63, Act 3 of 2026 and the Insurance Department notice cited in section 6.9, all read October 16, 2026. Purdon's annotated text was not read. This is the largest Pennsylvania-law chapter in the book, because the outline's cite is the whole Motor Vehicle Financial Responsibility Law (MVFRL).

6.1 The Motor Vehicle Financial Responsibility Law: Structure and Scope (75 Pa.C.S. 1701-1704)

The rule. Chapter 17 of the Vehicle Code is the Pennsylvania auto insurance statute. (75 Pa.C.S. 1701)

The Department of Transportation (PennDOT) administers the chapter generally (registration, licenses, proof), and the Insurance Department administers the provisions within its jurisdiction (insurers, forms, rates, cancellation review). (75 Pa.C.S. 1704) The chapter does not apply to a vehicle owned by the United States. (75 Pa.C.S. 1703)

Three vehicle labels decide many questions.

• A motor vehicle of the type required to be registered is the broad class. The required $5,000 medical benefit attaches to it, except for recreational vehicles not intended for highway use, motorcycles, motor-driven cycles and motorized pedalcycles. (75 Pa.C.S. 1711(a))
• A private passenger motor vehicle is a four-wheel motor vehicle (other than a recreational vehicle not intended for highway use) insured by a natural person that is either a passenger car neither used as a public or livery conveyance nor rented to others, or has a gross weight not exceeding 9,000 pounds and is not principally used for commercial purposes other than farming. A vehicle insured exclusively under a garage, sales agency, repair shop, service station or public parking policy is not one. (75 Pa.C.S. 1702) The tort option attaches to this class.
• A neighborhood electric vehicle must carry the same 15/30/5 financial responsibility, and no one must buy, or insurer offer, the chapter's other coverages for it. (75 Pa.C.S. 1788)

In Pennsylvania - household policy versus commercial policy

The chapter reaches a plumber's truck and a family sedan, but not in the same way. Both need the liability limits and the first party medical benefit. The tort option, the automobile cancellation article and the surcharge limits are written for private passenger vehicles. Chapter 7 returns to this. (75 Pa.C.S. 1702, 1705)

6.2 Required Liability Limits and the Minimum Policy (75 Pa.C.S. 1702, 1711, 1786, 1791-1792)

The rule. "Financial responsibility" is the ability to respond in damages for liability for accidents arising out of the maintenance or use of a motor vehicle in these amounts, in a form acceptable to PennDOT. (75 Pa.C.S. 1702)

This is read 15/30/5. Every motor vehicle of the type required to be registered that is operated or currently registered must be covered. (75 Pa.C.S. 1786(a)) The $5,000 medical benefit is required, not only offered: an insurer issuing liability policies on such vehicles must include it. (75 Pa.C.S. 1711(a)) Every insurer must also make available a minimum policy containing only the minimum financial responsibility and medical benefits. (75 Pa.C.S. 1711(b)) An insurer may not issue a policy with first party benefits unless the liability limits are at least the required amounts, so 15/30/5 and the $5,000 medical benefit travel as a package. (75 Pa.C.S. 1715(c))

Notices the producer's desk must handle.

• Notice of benefits and limits. A presumption that the insured was advised arises if a bold notice of at least ten-point type is given at application for original coverage, and no other notice or rejection is then required. It lists the benefits and higher limits that must be offered. (75 Pa.C.S. 1791)
• Minimum-cost invoice. At application and every renewal the insurer itemizes the minimum mandated coverages and their premium. (75 Pa.C.S. 1791.1(a))
• Higher limits. Except under the Assigned Risk Plan, an insurer writing bodily injury liability must make available higher UM, UIM and bodily injury limits up to at least $100,000 per person and $300,000 per accident (or $300,000 single limit at the insurer's option), and at least $5,000 property damage; the Assigned Risk exception does not apply to property damage. (75 Pa.C.S. 1792(a))

In Pennsylvania - what 15/30/5 means

Fifteen thousand is the most the policy pays one injured person, thirty thousand the most for everyone hurt in one accident, and five thousand the most for other people's property. A crash that destroys a $42,000 car leaves the at-fault driver personally owing the rest. (75 Pa.C.S. 1702, 1791, 1792(a))

6.3 Proof of Financial Responsibility and Enforcement (75 Pa.C.S. 1771-1788)

The rule. Coverage is not a private matter: the registration and the license ride on it. The applicant acknowledges on a PennDOT form that registration and operating privilege may be lost without coverage (75 Pa.C.S. 1781), and the registrant certifies financial responsibility at registration or renewal; PennDOT refuses to register or renew for noncompliance or a false certification. (75 Pa.C.S. 1786(b)(1))

Manner of proof. Proof is evidence satisfactory to PennDOT that all vehicles registered in the person's name are covered by liability insurance, self-insurance, or other reliable financial arrangements acceptable to PennDOT. (75 Pa.C.S. 1782(a)) A self-insurer must provide the required first party benefits, satisfy judgments up to the section 1774 amounts and provide UM up to those amounts, but need not accept assigned risks or fund the Assigned Claims Plan. (75 Pa.C.S. 1787)

The identification card. Insurers provide financial responsibility identification cards, valid only for the period for which coverage has been paid, and showing that period. If insurer and insured agree, the card may be solely electronic. Where premiums are financed or paid under a payment plan, cards may be issued for six months. (75 Pa.C.S. 1782(d)) Either a paper or an electronic card satisfies a request for proof; an officer may view only what is reasonably necessary, and the device owner bears liability for damage to the device. (75 Pa.C.S. 1786(c)(1)-(3)) An officer who views electronic proof in good faith is immune. (75 Pa.C.S. 1782(e))

Penalties for no coverage.

PennDOT may not restore a suspended privilege or registration until proof is furnished. (75 Pa.C.S. 1783) The statute carves out a lapse of under 31 days with no operation of the vehicle. (75 Pa.C.S. 1786(d)(2)) An owner who voluntarily surrenders plate and card when coverage ends is not penalized for the gap. (75 Pa.C.S. 1786(g)(2)) A person is not convicted of failing to produce proof if, within five days, he shows at the issuing authority's office that coverage was in force. (75 Pa.C.S. 1786(g)(1)) On an appeal of a suspension, notice of a lapse or failure to give requested proof creates a presumption of no coverage, overcome only by clear and convincing evidence that the vehicle was insured. (75 Pa.C.S. 1786(d)(3), (4)) An attack on the insurer's cancellation itself goes to the Insurance Commissioner, and a timely request stays the suspension. (75 Pa.C.S. 1786(d)(5))

Insurer duties. The insurer must notify PennDOT of a lapse, termination or cancellation in the way PennDOT's regulations prescribe, and for a policy that exists only to provide proof of financial responsibility, within ten days of the effective date. (75 Pa.C.S. 1786(e)(2), (3))

In Pennsylvania - online verification is coming in stages (Act 3 of 2026)

Act 3 of 2026, approved February 11, 2026, amended section 1786 and added section 1786.1. PennDOT must set up an online verification system that sends coverage inquiries to insurers by web service. Insurers issuing at least 1,000 motor vehicle liability contracts in Pennsylvania must take part. When the system confirms coverage the owner need not produce an ID card; when it finds none PennDOT must send a notice and a chance to give proof. Participating insurers are relieved of the reporting duties in section 1786(e)(2)(i) and (3). The act made 1786.1(a), (b)(7) and (i) effective immediately and the remainder effective 18 months after approval, about August 2027, so the card rules above are the working rules until then. (75 Pa.C.S. 1786, 1786.1; Act of Feb. 11, 2026, P.L. 4, No. 3)

Nonpayment of judgments. If a person fails within 60 days to satisfy a judgment from a motor vehicle accident, the creditor may send a certified copy to PennDOT, which suspends the debtor's operating privilege until the judgment is stayed or satisfied (at the 15/30/5 amounts) and proof is furnished. (75 Pa.C.S. 1771-1774)

6.4 Tort Options: Full Tort and Limited Tort (75 Pa.C.S. 1705, 1791.1, 1799.7)

The idea. Pennsylvania is a "choice" state. Each named insured on a private passenger vehicle policy chooses how to treat the right to sue for noneconomic loss, meaning pain and suffering and other nonmonetary detriment. (75 Pa.C.S. 1702) Economic loss is never taken away.

(75 Pa.C.S. 1705(c), (d)) For the 1990 transition, section 1799.7 required limited tort premiums at least 22 percent below, and full tort premiums at least 10 percent below, the December 1, 1989 premium. (75 Pa.C.S. 1799.7(b))

Serious injury means a personal injury resulting in death, serious impairment of body function or permanent serious disfigurement. (75 Pa.C.S. 1702)

Notice and default.

1. At least 45 days before the first renewal after July 1, 1990, and on application for new coverage, the insurer gives each named insured a standardized written notice on one sheet in prominent type, describing both options with the premium for each. (75 Pa.C.S. 1705(a)(1), (2), (4))
2. Limited tort requires the named insured to sign and return the notice. Without a signed return the insured is considered to have chosen full tort and is charged the full tort premium. (75 Pa.C.S. 1705(a)(1))
3. If there is no answer within 20 days, a second and final notice goes out. If neither is answered by ten days before renewal, the named insured and those he binds are conclusively presumed to have chosen full tort. (75 Pa.C.S. 1705(a)(3))
4. Any one named insured may make the election for all named insureds, and a person bound cannot claim inadequate information. (75 Pa.C.S. 1705(a)(2), (3))
5. The insurer repeats a short description of the options at every renewal and quotes the minimum cost under each on request. (75 Pa.C.S. 1791.1(b), (d))

Who is bound.

• The choice covers every private passenger policy of the named insured with the same insurer and continues through renewals and replacements until the insurer receives a properly executed form electing the other option. (75 Pa.C.S. 1705(b)(1))
• It binds all insureds under the policy (household spouses, relatives and minors in custody) who are not named insureds under another private passenger policy. (75 Pa.C.S. 1705(b)(2), (f))
• If two policies conflict, the person is bound by the option on the policy for the vehicle he was occupying, if he is an insured on it, and by full tort otherwise. (75 Pa.C.S. 1705(b)(2))
• A person who owns no registered private passenger vehicle and is neither a named insured nor an insured under any such policy is not precluded from suing (a pedestrian with no auto policy). (75 Pa.C.S. 1705(b)(3))

Limited tort is lifted, and the person recovers as if full tort had been chosen, when the at-fault driver:

Two more exceptions keep full tort rights. A limited tort person keeps them against a business that designs, manufactures, repairs or services motor vehicles for a defect caused or not corrected in that business, other than a defect in a vehicle that business is operating. (75 Pa.C.S. 1705(d)(2)) And a limited tort person keeps them when injured as an occupant of a motor vehicle that is not a private passenger motor vehicle, such as a motorcycle or commercial truck. (75 Pa.C.S. 1705(d)(3))

Related rules. An owner of a currently registered private passenger vehicle who has no financial responsibility is deemed to have chosen limited tort (75 Pa.C.S. 1705(a)(5)) and cannot recover first party benefits (75 Pa.C.S. 1714). A person barred from noneconomic damages by the election cannot recover them from UM or UIM either. (75 Pa.C.S. 1731(d)(2)) An insurer may not cancel, refuse to write or refuse to renew because of the tort option chosen. (75 Pa.C.S. 1705(e))

In Pennsylvania - the sentence the exam likes

If the insured does nothing, the answer is full tort. A limited tort election needs a signature; a full tort election does not. (75 Pa.C.S. 1705(a)(1), (3))