An Overview of § 1736 under the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL)

§ 1736 of the Pennsylvania MVFRL deals with Coverages in Excess of Required Amounts. Insurers may offer coverages that exceed the minimum limits mandated by law, but these cannot surpass the limits of liability highlighted in the bodily injury liability provisions of the insured’s policy.
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Statutory Text

§ 1736. Coverages in excess of required amounts.

The coverages provided under this subchapter may be offered by insurers in amounts higher than those required by this chapter but may not be greater than the limits of liability specified in the bodily injury liability provisions of the insured's policy.

Definition of Key Terms:

Coverages:

Refers to the scope of protection provided under an insurance policy.

Required Amounts:

Are the minimum coverages that must be offered under Pennsylvania motor vehicle insurance laws.

Subchapter:

Refers to a division of a chapter in the law, indicating that this particular law applies to a specific subset of the broader legislation.

Bodily Injury Liability Provisions:

These provisions take care of expenses like medical bills, loss of income, and pain and suffering that result from bodily injury to other parties in an accident where the insured is at fault.

Importance for Pennsylvania Drivers:

This section of the MVFRL is crucial for Pennsylvanian drivers as it allows them the option to secure additional coverage beyond the state-required minimum. The additional coverage could potentially safeguard against financial hardship in case they are implicated in a severe accident where damages exceed the minimum coverage.

Importance for Pennsylvania Attorneys:

For attorneys, a thorough comprehension of § 1736 is crucial to provide sound legal counsel to clients regarding their auto insurance needs. The interpretation of insurance contracts and applicability of coverages can often become a disputed issue in personal injury cases, and knowledge of this section can enable attorneys to help clients negotiate for more effective policies or seek rightful compensation.

Advanced Analysis:

The specific language used in § 1736 reiterates that insurers may not complete disregard the principles of risk assessment and compensation. The phrase "may not be greater than the limits of liability…” emphasizes that there is an upper limit to coverage, grounded in the cap stated in the insured's policy's bodily injury liability provisions. This ensures a delicate balance where insured individuals have both, the opportunity to obtain a higher degree of protection when necessary, while also preventing situations where excessive coverage can lead to moral hazards or inadvertently incentivize risky behaviors.

Insurers, on the other hand, are subtly reminded to deliberate the implication of offering higher coverages which could lead to disproportionately large payouts, that could impact their business model.

This analysis of § 1736 reflects that the notion of equity, prudence, and a conscious assessment of risk forms the underpinning of the legislation. It attempts to cater to the needs of different drivers, with varying degrees of risk, while ensuring the insurance business remains viable and continues to thrive.

About the author
Von Wooding

Von Wooding

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