What REALTORS® Need to Know About Auto Insurance and Why. | Pocono Mountains Association of REALTORS®

By James L. Goldsmith, Esq.

I represent REALTORS® in many situations in which there is a recognized need for a lawyer. Most of those situations involve REALTOR®clients, problem properties, forms or the Real Estate Commission. But with increasing frequency, I am fielding calls from REALTORS® who were injured in car accidents. Some of these accidents happen while the REALTOR® is working. My ability to help a REALTOR® recover lost income and lost economic opportunity (a particular problem for REALTORS® who are not paid an hourly rate or salary), sometimes runs into a brick wall.

REALTORS® are not unlike others who want to save money and therefore look for ways they can reduce their insurance premiums. Pennsylvania, which is a modified “no-fault” state, provides a number of opportunities to save on insurance premiums. Electing the limited tort option is one. That saving, however, comes at a potentially big price.

In exchange for the reduced cost of selecting the limited tort option, you give up the right to sue for non-economic damages, typically thought of as “pain and suffering, “ (there is an exception that I will talk about below). Generally, however, you are limited to recovering your medical expenses and wages loss from your own automobile insurer. and only up to the amount of the insurance limits for medical benefits and lost wages that you have purchased from your insurer. To the extent that your medical bills and wage loss exceed your insurance coverage, then you will be able to proceed against the operator of the vehicle that caused your injury for the excess. As I said, proving wage loss for REALTORS® is or can be a somewhat complicated process.

So why should you consider not selecting the limited tort option? Why not give up the right to sue for pain and suffering and the other non-economic losses? From personal experience, I can tell you that my clients who have elected the limited tort option have a quick change of heart whey they are involved in accidents and learn that the financial recovery they make will only go to cover medical bills and perhaps an extremely small amount for lost wages. There is nothing left over to compensate for the loss of life’s pleasures and the potential reduction of their earning capacity as a result of the accident. Further, the economic losses that one is entitled to recover when electing the limited tort option (damage to your car, wage loss limited to the amount of coverage you purchased, medical expenses are also limited to the amount purchased) are often insufficient to cover the real costs that you have suffered.

What you recover for your damaged car may be rooted in its fair market value; but frequently an older car has value to you that exceeds its Blue Book value. Further, the extra help you may want around the home (e.g., having that cleaning service come four days a month instead of two, etc.) doesn’t get reimbursed. Then there is the everyday annoyance and aggravation caused by the pain and the difficulties imposed as a result of someone else’s fault. Money is not a compress that brings relief to pain, but it can ease the financial burden that often follows pain. I have not met a client involved in an accident who has the limited tort option and has not regretted its selection!

The exception to the limit on suing for pain and suffering is the case of serious bodily injury. By that I mean even if you have elected the limited tort option, you can sue for pain and suffering if the accident causes death (okay, it will be your estate that sues and not you), serious impairment of a body function, or permanent and serious disfigurement. How do you know whether you have crossed the threshold and have sustained a serious bodily injury? It depends! There are cases that are reported in Pennsylvania that lend guidance and in the absence of any clear definition, one can always sue and in the process of litigation determine whether you are entitled to the damages or not.

Rather than waiting for a jury to decide whether your bodily injury is “serious,” select the full tort option. Of equal importance to REALTORS® is electing uninsured motorist coverage and underinsured motorist coverage. In my opinion, you should never say no to these options! By purchasing these types of coverages, you are assured that if you are injured in an automobile accident, you will have a source of funds to look to even if the responsible driver has no insurance or has insurance coverage with low limits (e.g., you are very seriously injured, but the other driver only has $25,000 in liability coverage). Rarely do REALTORS® have long-term disability policies and you are generally excluded from workers’ compensation coverage. Therefore, when you are injured in an accident and the responsible driver has little or no insurance, you will find yourself unreimbursed for your total wage loss and left standing with medical expenses not covered by your automobile coverage. (Question: will your health insurance provide you with coverage if you exhaust the covering in your automobile policy?)

This article barely scratches the surface, but underscores the important need to analyze your automobile insurance policy and needs with your insurance agent. Do not skimp on the policy. While we hope you have many, many, many years of paying premiums for benefits you will not need, you want to know that benefits will be there when and if needed. Use your web browser to research Pennsylvania’s no-fault insurance law using key words: Pennsylvania limited tort option, underinsurance coverage and other terms used in this article.

Safe driving.

Jim Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees. He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends REALTORS® in disciplinary hearings conducted by the Real Estate Commission. He routinely counsels employers on employee relations issues and is one of the voices of the PAR Legal Hotline. He may be reached at www.realcompliance.com.