3.1 Pennsylvania Auto Insurance Requirements

The Motor Vehicle Financial Responsibility Law (MVFRL)

Pennsylvania auto insurance is built on the Motor Vehicle Financial Responsibility Law (MVFRL), codified at 75 Pa.C.S. §1701 and following. The MVFRL replaced the older No-Fault Act in 1984 and is one of the most heavily tested PA-specific topics on the property & casualty producer exam. It does three big things: it sets mandatory minimum liability limits, it requires first-party medical benefits, and it creates Pennsylvania's distinctive 'choice no-fault' tort election — the limited-tort/full-tort decision that no other coverage rule mirrors.

Every vehicle registered in Pennsylvania must be insured continuously. Driving without the required coverage exposes the owner to license and registration suspension, fines, and a restoration fee. Proof of financial responsibility is normally satisfied by an auto liability policy, though self-insurance is available to fleets that qualify with the PA Department of Transportation.

Mandatory Coverages and the 15/30/5 Minimum

The MVFRL requires three coverages on every private-passenger policy:

The shorthand 15/30/5 captures the liability minimums: $15,000 per injured person, $30,000 total per accident, $5,000 property damage. These are floor figures — producers routinely recommend 100/300/100, because a single serious injury easily exhausts $15,000.

First-party benefits (FPB) are the no-fault medical piece. The required minimum is $5,000 of medical benefit, payable for the insured's own accident-related medical care no matter who caused the crash. Optional FPB add-ons that insurers must make available include income loss (a percentage of lost wages, subject to monthly and aggregate caps), accidental death, and funeral benefit. Medical-benefit payments are subject to the Act 6 cost-containment fee schedule, which caps provider charges at a percentage of the Medicare allowance.

Limited Tort vs. Full Tort — the 'Choice No-Fault' Election

The most heavily tested MVFRL concept is the tort election under §1705. Every named insured must choose, in writing, between two options that govern the right to recover non-economic damages (pain and suffering, loss of life's pleasures):

• Full tort — the insured keeps the unrestricted right to sue the at-fault driver for both economic AND non-economic damages. Higher premium.
• Limited tort — the insured pays a lower premium but gives up the right to sue for pain and suffering unless the injury qualifies as a 'serious injury' (death, serious impairment of body function, or permanent serious disfigurement). Economic damages — medical bills, lost wages, out-of-pocket loss — are always recoverable under either option.

If the insured does not make a written election, the policy defaults to full tort. The election binds the named insured, spouse, and resident relatives.

Exceptions that override limited tort

Even a limited-tort insured is treated as full tort when the at-fault driver:

1. Is convicted of, or accepts ARD (Accelerated Rehabilitative Disposition) for, DUI in that accident;
2. Is operating a vehicle registered in another state;
3. Intends to injure himself or another person;
4. The injured party was an occupant of a vehicle other than a private passenger motor vehicle (e.g., a pedestrian or commercial vehicle occupant).

These exceptions are favorite exam traps — memorize that DUI and out-of-state registration flip limited tort to full tort.

Uninsured / Underinsured Motorist and Stacking

Under the MVFRL, insurers must OFFER Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage in an amount equal to the bodily-injury liability limits the insured selected (and at least the 15/30 minimum). UM/UIM is not mandatory — the insured may reject it, but only by a signed written rejection that meets the statute's exact wording. A defective waiver is void, and the coverage is read into the policy at the liability limits.

• UM pays the insured's bodily-injury losses when the at-fault driver has no insurance (or is a hit-and-run / phantom vehicle).
• UIM pays when the at-fault driver is insured but their limits are insufficient to cover the loss.

Stacking lets an insured combine the UM/UIM limits of multiple vehicles on one policy (or across household policies) to raise total available protection — e.g., two cars each with $50,000 UIM can stack to $100,000. PA law makes stacking the default; the insured can waive it only with a separate signed written waiver of stacked coverage to obtain a lower premium. Like the tort election, a missing or invalid stacking waiver means coverage is stacked.

Drivers who cannot obtain coverage in the voluntary market are insured through the PA Assigned Risk Plan, the residual market mechanism that spreads high-risk policies among admitted insurers.

Additional MVFRL Rules Producers Must Know

Several other MVFRL provisions appear on the state exam. Proof of financial responsibility must be maintained continuously; a lapse can trigger registration suspension and, on reinstatement, a restoration fee. Insurers must give the insured 30 days' advance written notice of cancellation or nonrenewal for most reasons, and may not cancel a policy in force more than 60 days except for nonpayment, license suspension, or fraud. Named-driver exclusions are permitted in Pennsylvania, letting an insured exclude a specific high-risk household driver to keep coverage affordable.

The safety/anti-theft and good-driver discounts are mandated offerings, and insurers must apply a surcharge plan that complies with the Act 6 rules limiting surcharges to at-fault accidents above a dollar threshold and certain convictions. Finally, producers should remember that the tort election and the UM/UIM and stacking waivers are each separate, signed documents — combining them or using non-conforming language can void the waiver and read the broader coverage back into the policy at the insured's selected limits, a costly errors-and-omissions exposure for the agent.