Automobile Insurance: Beware of the Consequences of the Uninsured Registered Vehicle

by William Jorden on September 14, 2012

Joe Plaintiff suffered an extreme painful strain/sprain of his neck, cartilage and ligament damage to his right knee and multiple contusions and minor lacerations when the car, in which he was a passenger driven by Molly Defendant, ran a red light and into the path of an oncoming car.  Joe was the registered owner of a Mustang which, due to transmission failure, he had parked in his garage until he could save enough money for repairs.  Molly put Joe as an additional insured on her vehicle which Joe and Molly shared.  Since Joe’s Mustang was disabled he allowed his insurance coverage on the Mustang to lapse.

After the car accident, Joe’s job enabled him to continue to work without loss of pay.  Joe’s medical bills, including ambulance, hospital, physicians and physical therapy, quickly exceeded a $15,000 amount.  Joe applied under Molly’s automobile insurance for payment of medical expense First Party Benefits.  Molly’s insurance company told Joe that because he owned a registered uninsured vehicle they intended to deny payment of his First Party Benefit claim.  Joe then sought the advice of counsel of an experienced personal injury attorney.  These are the questions Joe asked his attorney and the attorney’s answers. You may find the answers surprising.

Joe Plaintiff Question:

I am a named insured under Molly’s automobile policy.  I was injured as a passenger in her vehicle.  My own vehicle is inoperable and for that reason I let my insurance lapse.      Why can I not recover the medical expense benefits under Molly’s policy?

Attorney Answer:

Section 1714 of the Pennsylvania Motor Vehicle Financial Responsibility Law at Section 1714 states “an owner of a currently registered motor vehicle who does not have financial responsibility or an operator or occupant of a recreational vehicle who does not have financial responsibility cannot recover First Party Benefits.”  The Act provides no exceptions for disabled vehicles.  As long as it is registered and not insured, an injured claimant cannot claim First Party Benefits from any other policy of insurance he may have or from a policy of insurance covering any other vehicle involved in the accident. The law is that you cannot be paid your medical expenses from Molly’s insurance company even though you are a named insured.

Joe Plaintiff Question:

I’ve suffered extreme pain and my life is in shambles through no fault of my own.  This accident was a result of Molly’s negligence.  Molly should be held liable for my injuries.  Can I get Molly’s insurance company to pay me for my pain, suffering and inconvenience.

Attorney Answer:

Because of the fact that you are the owner of a registered uninsured vehicle, the answer is no you cannot sue Molly for what we call non-economic damages.  Not only does the MVFRL prohibit an uninsured owner of a registered vehicle from obtaining First Party Benefits, it simultaneously provides that “an owner of a currently registered private passenger motor vehicle who does not have financial responsibility shall be deemed to have chosen the Limited Tort alternative, 75 Pa C.S. § 1705(a)(5).

Let me explain the difference between the Limited Tort Option and the Full Tort Option.

Let’s discuss first the 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 right 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 non-monetary damages unless the injuries suffered fall within the definition of “serious injury”.  In order the meet the “serious injury” threshold, injuries have to result in a significant degree of physical impairment.  This is an issue insurance companies like to raise in defense of otherwise meritorious claims.  In my opinion, your injuries are not sufficient to meet the serious injury threshold.  Consequently you cannot seek payment from Molly’s insurance carrier for pain, suffering and other non-economic damages.

Choosing the “full tort” option, on the other hand would allow you and other household members covered under this policy to seek financial compensation for pain and suffering and other non-monetary damages as a result of the injuries caused by other drivers and, in your case, by Molly.

Even though you may have chosen “full tort” coverage in your lapsed policy and even though Molly had elected “full tort” coverage when adding you to her policy, because you are the owner of a registered uninsured motor vehicle according to Section 1705 (a)(5) of the MVFRL, “an owner of a currently registered private passenger motor vehicle who does not have financial responsibility shall be deemed to have chosen the limited tort alternative.” 75 PA C.S. 1705 (a)(5)  Because of the limited tort status, no recovery for non-economic damages is possible when your injury does not meet the “serious injury threshold”.

Joe Plaintiff Question:

Well, can I recover from Molly’s insurance company my economic damages?  My health insurance has been paying my medical expenses subject to a deductible.  I don’t have any income loss because I was able to go back to work but can I claim reimbursement of my medical bills?

Attorney Answer:

Before February 2012, by reason of several Superior Court Opinions interpreting Pennsylvania Law, it seemed that the owner of a registered uninsured motor vehicle was not permitted to claim either First Party Benefits nor economic damages from the third party tort feasor.  Economic loss or damages are commonly understood as being comprised of damages for medical expenses and wage loss.  It is these damages that prior to February 2012, were not permitted to be recovered either as a First Party Benefit or as part of a third party tort action.  The case of Corbin v. Khosla was decided by the Pennsylvania Supreme Court on February 21, 2012. (42 A.3d 254) That case resulted in a controlling decision in Pennsylvania that although an owner of a registered uninsured vehicle is considered to be subject to the limited tort option and cannot claim First Party Benefits, that individual may bring an action for recovery of economic damages in suit against the negligent operator who caused the damages claim.

Joe Plaintiff Question:

So what can I get from Molly’s insurance company?

Attorney Answer:

Joe as I have explained you will get zero (0) dollars for your non-economic damages such as pain, suffering, loss of life’s pleasures, etc., because by being the owner of an uninsured registered vehicle, you are deemed to have selected the limited tort option which prohibits such a recovery.  While you can sue for economic damages, you told me you had incurred zero (0) dollars in loss of income.  Although your health insurance company has paid a substantial amount of medical bills, Section 1722 of the MVFRL precludes you from recovering these medical bills while at the same time, Section 1720 provides that your health insurance company cannot seek reimbursement from any tort recovery you might obtain from the medical bills paid.  Accordingly it is a wash and you get zero (0) dollars for the medical bills paid by your insurance company.  The only amount you can recover is reimbursement toward the out-of-pocket amounts that you paid as deductibles or co-pays.

Joe Plaintiff Question:

Okay – will you take my case and sue Molly for my deductibles and co-pays which at this point are in a high 3 digit amount?

Attorney Answer:

Before answering your question, I would like to point out to you what the Court in the Corbin v. Khosla case said about this.  The Court stated at Page 260 of its Decision, “A straight forward reading and analysis shows that, in addition to the potential loss of driving privileges and fines, Pennsylvania attempts to deter motorists from driving without insurance in two (2) ways.  First, such motorists are limited in the recovery of non-economic damages by virtue of faulting to limited tort.  Second, such motorists are precluded from making claims for First Party Benefits against any policies under which they might have otherwise been eligible for benefits as an insured, a named insured, or the occupant of an insured vehicle.  Clearly, Section 1714 precludes uninsured drivers from participating in the First Party Benefit system as a sanction or penalty for driving without insurance.  This preclusion deprives the uninsured driver of speedy payment of medical and wage loss benefits from any first party carrier through a direct claim against a policy for no-fault benefits.  It does not, however, preclude an uninsured motorist from making a claim for economic damages in tort.  Indeed the MVFRL expressly deems an uninsured motorist to have elected the limited tort option.  Thus, the relevant provisions of the MVFRL remove uninsured drivers from any potential participation in the first party no-fault system, and thrust the uninsured driver into the uncertainty, time and expense required to sue the tort feasor, establish fault, and recover payment limited to economic damages (and non-economic damages in the event of serious injury) from the tort feasors insurance company under the third party liability provisions of the insured’s policy.

I place emphasis on the court’s reference to the owner of a registered uninsured vehicle being thrust into the uncertainty, time and expense required to sue the tort feasor, establish fault, and recover payment limited to economic damages.  My payment for representing accident victims is one-third of the amount of the recovery I am able to secure.  I invest considerable time in pursuing every case that I accept.  I advance all expenses of litigation which includes payment for medical records and for the reports and testimony of treating physicians, as well as for filing fees, court reporter, transcript, investigative charges and expert charges, etc.  For this one-third fee I assume all risks that are inherent in the uncertainty mentioned by the Supreme Court.  That uncertainty includes the ever present possibility that a particular jury on a given day will find against the plaintiff as to liability and/or will find for the plaintiff as to liability but will award such a small amount of damages as to be insufficient to cover the attorney’s time and expenses invested in the case.  Taking into mind these considerations and the fact that your only recovery is your out of pocket deductibles and co-pay, I regretfully have to answer your question in the negative.  No I will not accept your case which is another consequence of your owning an uninsured registered vehicle.

{ 0 comments… add one now }

Leave a Comment

Previous post: