Insurance 101: First Party Benefits

Posted August 16, 2016 Insurance 101

Previously, we explained the importance of reviewing the limits of liability coverage (Pennsylvania mandates a minimum limit) within your auto policy to help protect you in the event of an accident or loss. We also provided you with information about optional coverages, Uninsured (UM) and Underinsured Motorist Coverage (UIM), which would provide you some coverage as a result of an accident with an uninsured, hit-and-run, or underinsured driver.

While these coverages are important to include in your auto policy, they may not provide coverage for all of your needs after an accident. For example, if you are unable to work for a period of time after an auto accident, are you able to receive money for expenses or outstanding medical costs? Are there coverages to help you or your family in the event of a death or funeral?

To help answer these questions, we’ll explain affordable coverages you can add to your auto policy.

First Party Benefits

First party benefits are coverages provided to you and your family regardless of fault in an accident. Coverages found within first party benefits include:

Medical Payments (required) – This is the only required first party benefit in Pennsylvania, with a minimum of $5,000 per person in medical payments. How does this coverage help you? Medical payments coverage can be used toward costs like a deductible or coinsurance. If you feel that you are in need of a higher limit, you can purchase up to $100,000 of medical payments coverage.

Extraordinary Medical Benefits (optional) – If you require more than $100,000 medical payments coverage, you can purchase extraordinary medical benefits coverage up to $1,000,000.

Work Loss Coverage (optional) – This coverage provides you and your family access to money if you are unable to work for a period of time after an accident. Depending on the limits you select, work loss coverage can work in conjunction with your Short Term Disability coverage, up to 100% of your income.

Accidental Death Benefit (optional) – In the event you or another covered driver would pass away in an auto accident, this coverage would provide a monetary benefit to your family, up to $25,000.

Funeral Benefit (optional) – In addition to the accidental death benefit, the funeral benefit is used to help reimburse your family for funeral costs, up to $2,500.

While you can choose which first party benefits to include in your auto policy (remember medical payments coverage is required), you also have the option to combine all of these coverages into a single limit of up to $177,500. What does this mean? Regardless of fault in an accident, the most you would receive under your first party benefits coverage is $177.500.

Do you know if your current auto policy includes these coverages? If so, do you feel that your current limits meet the needs for you and your family? Did your current agent review first party benefits with you in detail?

If you answered “No” to any of these questions, it may be time to speak with an expert who is here for you. Contact our Experts by calling (412) 281-1842.