Do I want "limited tort" or "full tort" auto insurance?

July 11, 2005 10:15 PM

Do I want "limited tort" or "full tort" auto insurance?

Since the "limited tort" option is apparently of somewhat recent vintage, and only exists in some areas (I'm in New Jersey), maybe I should explain what it is, for the curious: the idea is that by electing "limited tort" I waive my right to sue a negligent driver for pain and suffering, although I can still sue for medical expenses. In exchange for this I get a reduction in my insurance premium. (I don't know how this works on the back end -- I suppose the insurance companies must be paying one another, or maybe paying the government, based on how many "limited tort" policies they are carrying.)

The choice makes a big difference in my insurance quote -- e.g., with GEICO, choosing "limited tort" changes the premium from around $1000 to around $600 per six months. I'm finding it hard to estimate in any intelligent way how much additional risk I would be taking on. I also haven't managed to get information or advice on the subject that isn't obviously biased; as far as I can see, Google just brings up a bunch of trial lawyers, all of whom take a predictably dim view of the "limited tort" option.

In case it matters, I'm 28 and this is my first car.

posted by em to work & money (9 comments total)

The short answer: It's completely up to you.

The (really) long answer: It really is a toss up. What happens with auto insurance in general is that if you're in an accident where the other party is found at fault, their policy will pay for your injuries and damage to your vehicle up to the limits of their policy. If your expenses exceed their limit, your policy can kick in to cover some of that. Or, GEICO will pay for everything and then subrogate (that is, they'll pursue 'reimbursement' from the other insurance company), or if the other party is uninsured or underinsured, you have coverage that will kick in and cover you up to the limits on your policy. That's all part of their/your liability coverage, which you're required by the state to carry, so as long as you have the coverage, you'll be indemnified.

Where Full and Limited Tort come in is beyond that. You would exercise your Tort option if, say, you felt that your quality of life had suffered in some way as a result of the accident (pain and suffering, mental anguish, etc), and you were no longer able to live your life the way that you'd lived it pre-accident. To define the word, "Tort" is simply a private or civil wrong/injury which has violated your rights, and the law in some states (such as NJ and PA) gives you the right to seek monetary damages.

Here's what I would tell someone as an insurance agent who may or may not work for the company you're with: Your decision to accept or reject your Tort option should probably depend on how likely you think you'd be to use it should an accident occur, and whether you think you can afford the coverage. It's a nice thing to have, but it's a little spendy. It's also something you can add to your policy at any time, or reject at any time with an option form. Most policyholders choose to reject it.

I hope that helps. I'd honestly encourage you to call GEICO, or go to the website and email them, because the GEICO agents in the NJ region might be able to get into a little more of the nitty gritty if I'm not explaining it clearly.
posted by mewithoutyou at 11:23 PM on July 11, 2005

And it should also be said that any advice or commentary is in no way given in my official capacity as an insurance agent, and does not represent the company that I may or may not work for. I'm off the clock!
posted by mewithoutyou at 11:26 PM on July 11, 2005

"Limited tort" doesn't mean that if you get injured in an accident you're totally fucked. It just means your right to sue for certain damages is limited. Know what I'm saying?

Anyway, I'd go with the limited tort option since it's so much less expensive. I've had limited tort insurance for as long as I've had my own policy and, well, it's worked fine for me.

Maybe upgrade to full tort in a couple years when your premiums go down, or if/when the disparity between full and limited is a bit smaller.
posted by elisabeth r at 7:22 AM on July 12, 2005

Wow, those rates are low enough you shouldn't be complaining! A married mother of 40 couldn't touch those rates in my province (although they might get close if they whittled it to the bare minimum).

Consider yourself lucky and get the full tort coverage, IMHO. If rates were like that here I'd not be looking for third party insurance, never mind tort/non-tort stuff (I doubt they'd cover that anyways...)
posted by shepd at 8:00 AM on July 12, 2005

As a practical matter, tort coverage beyond basic automotive insurance is a waste of money. Your basic insurance will cover your losses or another person's if its your fault. I am sure your state has a minimal coverage amount. Just get that. If you ever need anything above and beyond that, just rely on actual lawsuits. Tort coverage in excess of liability coverage is a scam by insurance companies to get in on the PI game.
posted by dios at 11:22 AM on July 12, 2005

Limited - after many and many and many hours of this, please just pay less and don't sue people.

Again, please.
posted by sled at 8:28 PM on July 12, 2005

Long(er) answer is that that claims won't handle you a whole lot different whether you're full American tort or limited tort (depending on what the courts determine that to be). Your risk is about the same regardless on a actuality basis, your indemnity is also about the same. If you're looking at over a 10% difference in comparison I'd hands down move towards limited tort coverage. Also, be careful what other 'coverage' they are trying to underwrite on you - it sound as though they are cushioning their float, increasing their sales incentives.
posted by sled at 8:35 PM on July 12, 2005

Sounds like "limited tort" is going to be the way forward for me. Thanks for all the information and reassurance!
posted by em at 9:59 PM on July 12, 2005

I wouldn't recommend getting it. You always lose when you waive litigation rights.

I would go with basic minimal insurance. That protects you if you are at fault. If the other person is, their insurance will protect you or companies UIM coverage will. But if the other insurance doesn't make you whole, you will be better off pursuing litigation instead of relying on an insurance policy. Never forget, anything an insurance company offers you is better for them than you.

This is coming from someone who used to be a plaintiff's catastrophic tort attorney and now does defense. I have seen both sides of the insurance game. It's a racket. Keep your rights to sue.
posted by dios at 9:33 AM on July 14, 2005