Pennsylvania P&C Study Guide

Pennsylvania P&C has one topic that dominates everything else — the full tort / limited tort choice every driver makes — plus a cluster of Pennsylvania-only mechanics around stacking, workers’ compensation and a residual property market that a surprising amount of study material claims does not exist. Get the tort election cold and you have banked the most-tested points on the exam.

Auto — the choice no-fault system, and the default

Under the Motor Vehicle Financial Responsibility Law, every Pennsylvania driver elects one of two worlds. Full tort keeps the unrestricted right to sue for pain and suffering at any level of injury, for a higher premium. Limited tort trades that right away for minor injuries in exchange for a lower one — economic losses stay recoverable either way, and the right to sue survives where the injury is serious or another statutory exception applies.

Then the part that separates prepared candidates:

Minimum limits are 15/30/5, with a combined single limit of $35,000 available from some insurers as an alternative. Every policy carries a mandatory first-party medical benefit with a $5,000 minimum, paid regardless of fault — Pennsylvania’s PIP analogue and a state signature. Optional first-party benefits include income loss, accidental death, funeral benefits, and extraordinary medical benefits up to $1.1 million for expenses exceeding $100,000.

Stacking — the coverage you sign away

Pennsylvania lets UM and UIM limits stack across insured vehicles by default: three cars at $50,000 each combine to $150,000. To get the lower premium, the named insured must sign an anti-stacking waiver. UM and UIM themselves must be offered and may be rejected only by a signed, dated written waiver on a separate form (75 Pa.C.S. § 1731).

The FAIR Plan — correcting a claim you will encounter

You will find material asserting that Pennsylvania has no FAIR Plan and that high-risk property owners must use surplus lines. That is false.

The Insurance Placement Facility of Pennsylvania, marketed as the PA FAIR Plan, was created by Act 233 of 1968, which became effective 1 August 1968; the Facility itself commenced operating on 28 October 1968. It is an association of the property insurers doing business in Pennsylvania, and it writes fire, homeowners, renters, property, and vacant and seasonal property for owners who cannot obtain coverage voluntarily. A question asking where a repeatedly-declined Pennsylvania homeowner turns has an admitted-market answer.

Workers’ compensation — and the IRE

Pennsylvania requires coverage of nearly every employer, from the first employee, including seasonal and part-time workers — no numeric threshold, where most states set a floor of three to five. The waiting period is 7 days, with benefits beginning on the eighth day and the first seven payable retroactively once the worker has been off work 14 days. Wage loss runs at about two-thirds of the average weekly wage, subject to a maximum that resets annually. Employers comply through a private carrier, the State Workers’ Insurance Fund (SWIF) — a competitive state fund, not a monopoly — or approved self-insurance.

Cancellation, nonrenewal, and when the carrier fails

Pennsylvania is unusually policyholder-friendly, and it reuses the number 60: a 60-day initial underwriting window on a new auto policy, 60 days’ notice to cancel personal auto on a permitted ground after that, and 60 days’ notice to nonrenew a personal auto policy — with the specific reason stated. The exceptions run the other way: 15 days for the short-form auto grounds (nonpayment, or licence/registration suspension), and 30 days for homeowners — a single figure that covers homeowners cancellation and nonrenewal alike under 40 P.S. § 1171.5(a)(9). And an insurer may not surcharge or refuse renewal because of a not-at-fault accident (75 Pa.C.S. § 1799.3).

When a property-casualty insurer becomes insolvent, the Pennsylvania Property and Casualty Insurance Guaranty Association (PPCIGA) pays up to $300,000 per claimant, with unearned premium capped separately at $10,000 per policy — and it can never pay more than the insolvent insurer owed under the policy.