An Overview of § 1715 under the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL)

Section 1715 of the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL) mandates the availability of sufficient first-party benefits in any auto insurance policy, detailing minimum terms for medical, income loss, funeral, and accidental death benefits.

Statutory Text

§ 1715. Availability of adequate limits.

(a) General rule.--An insurer shall make available for purchase first party benefits as follows:

(1) For medical benefits, up to at least $100,000.

(1.1) For extraordinary medical benefits, from $100,000 to $1,100,000, which may be offered in increments of $100,000, as limited by subsection (d).

(2) For income loss benefits, up to at least $2,500 per month up to a maximum benefit of at least $50,000.

(3) For accidental death benefits, up to at least $25,000.

(4) For funeral benefits, $2,500.

(5) For combination of benefits enumerated in paragraphs (1), (2), (3) and (4) and subject to a limit on the accidental death benefit of up to $25,000 and a limit on the funeral benefit of $2,500, up to at least $177,500 of benefits in the aggregate or benefits payable up to three years from the date of the accident, whichever occurs first, provided that nothing contained in this subsection shall be construed to limit, reduce, modify or change the provisions of subsection (d).

(b) Higher or lower limits and additional benefits.--Insurers may make available higher or lower limits or benefits in addition to those enumerated in subsection (a).

(c) Restriction on providing first party benefits.--An insurer shall not issue or deliver a policy providing first party benefits in accordance with this subchapter unless the policy also contains coverage for liability in amounts at least equal to the limits required for financial responsibility.

(d) Limitations.--The maximum medical benefit which shall be paid on behalf of any one eligible claimant under subsection (a)(1.1) shall be $50,000 per year and $1,000,000 lifetime aggregate of reasonable and necessary expenses only for medical treatment and rehabilitative services which, as described in section 1712(1) (relating to availability of benefits), exceed $100,000. During the first 18 months of eligibility, the insurer shall approve payments on behalf of a claimant without regard to the $50,000 per year limit but subject to the $1,000,000 lifetime aggregate.

(e) Other extraordinary medical benefits.--Notwithstanding the requirement of subsection (a)(1.1), an insured may obtain the extraordinary medical benefits described in that subsection through any insurance contract, program or group arrangement.

(f) Determining adverse experience of an agent.--For purposes of determining adverse experience of an agent, experience generated from extraordinary medical benefit coverage described in subsection (a)(1.1) shall be excluded.

(g) Voluntary pooling.--Notwithstanding any other provisions of this act or the act of June 11, 1947 (P.L.538, No.246), known as The Casualty and Surety Rate Regulatory Act, two or more insurers may enter into an arrangement or agreement to provide for the availability of an extraordinary medical benefit pursuant to the provisions of this chapter. All such arrangements or agreements entered into by an insurer shall be subject to the prior approval of the Insurance Commissioner.

Definition of Key Terms:

"First party benefits”

Refers to the benefits that the insurance provider pays directly to the policyholder (insured) in the event of loss or damage due to an accident.

“Extraordinary medical benefits”

Benefits for higher amount of expenses resulting from severe injuries and damages (from $100,000 to $1,100,000) under an auto insurance policy.

"Financial responsibility"

Refers to the requirement to demonstrate capability of paying for potential losses in the case of a motor vehicle accident.

"Adverse experience"

Refers to the track record of a policyholder incurring losses, which affects insurance premiums and availability of coverage.

“Voluntary pooling”

An arrangement where two or more insurers combine resources to cover large potential losses.

Why does this matter for Pennsylvanian drivers?

Section 1715 mandates that insurance companies in Pennsylvania offer sufficient insurance coverage, ensuring drivers are financially protected during accidents. First-party benefits including accident death benefits, medical benefits, income loss benefits and funeral benefits, among others, will be provided. It also provides an option to acquire extraordinary medical benefits, catering to a wide range of consumer preferences and financial capabilities.

Why does this matter for Pennsylvania attorneys?

As attorneys, understanding this section is vital in assisting clients in handling motor vehicle accidents. It helps in distinguishing the obligatory first-party benefits from optional additional ones. It is also important in advising clients accurately about their insurance choices based on the required minimums and the possibilities of higher or lower limits.

Advanced Analysis of the Language Used:

In §1715, the legal obligation of insurers is emphasized through phrases such as "an insurer shall make available for purchase" and "insurers may make available higher or lower limits or benefits." The term "shall" makes these parts of the law mandatory, offering legal protection to motorists.

This section also clearly addresses the variety of benefits that insurers must offer, emphasizing that it's not limited to injury-related benefits, but also includes compensation for income loss, accidental death, and funeral costs.

Clause (c) introduces the law's safeguarding mechanism for insurance companies from potential abuse by demanding the policy to contain coverage for liability at least equal to the required limits for financial responsibility before providing first-party benefits.

The language not only prescribes the requirements but also introduces flexibility such as in clause (b) that allows insurance companies to offer custom options and in clause (e) mentioning the possibility of obtaining extraordinary medical benefits from any insurance contract.

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Von Wooding

Von Wooding

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