Pennsylvania Raises Auto Insurance Accident Surcharge Threshold Again

Pennsylvania auto insurers will not be able to surcharge private passenger policyholders with claims unless their aggregate claim cost over a three-year period exceeds $2,100. This new threshold is effective in July and is up from the current $1,900.

Insurers cannot cancel or refuse to renew a policy, or apply any surcharge, rate penalty or driver record point assignment if a policyholder’s claims do not exceed the new cap of $2,100, explained Acting Insurance Commissioner Michael Humphreys in announcing the new amount.

Automobile insurers are required to provide their surcharge disclosure plans to applicants when they apply for coverage and to their policyholders at least once a year. Humphreys said insurers should file updated rates and rules no later than April 1, 2023.

Pennsylvania law requires the Insurance Department to adjust the threshold cap at least once every three years, relative to changes in the consumer price index for medical care and automobile maintenance and repair costs. In the past, updates typically only happened once every three years.

Last year, in 2022, the department increased the cap after two years, from $1,800 to $1,900. In 2023, the department is increasing it again from $1,900 to the new cap of $2,100.