In the event of an accident, it is the responsibility of the insurance company to compensate those injured for their losses. It’s critical that victims recognize that liability coverage comes with policy limits; essentially referring to a maximum amount allocated by the insurer towards settling damages caused by another party’s negligence.
Accident victims may be uncertain about what will occur if the settlement amount surpasses their insurance policy limits. Although these incidents are uncommon, it is still prudent to understand what must be done in such a circumstance. For instance, if an individual sustains severe injuries due to an incident and their coverage limit for personal injury is $80,000 then they will only receive this amount even if the compensation exceeds this figure.
The complete compensation package may encompass property damage, medical bills, lost wages, and more.
How Do Policy Limits Affect Settlement?
When the defendant is responsible for the collision, the insurance carrier must take into consideration all the essential details of the case. They must seek to negotiate with the injured victim. The insurer must provide a fair settlement for the claim. However, the amount will not exceed the policy limit.
However, oftentimes the insurance company tries to cover the claims by providing an amount that is less than the policy limit. In most cases, the policy amounts are acceptable to the victim. Only in some cases do car accident lawsuits go to trial.
Can You Get More Than Policy Limits?
The short answer is yes. You can get more than the insurance limits of the at-fault party. A plaintiff may file suit against the other party, and if you are awarded more than the insurance limit, you may collect on that judgment. You may also collect if the other party has an umbrella policy.
Sometimes the other party’s insurance company acts negligently and becomes liable for damages. In addition, if you have an insurance policy that covers bodily injury, you can collect from that as well.
What Are The Liability Limits In An Automobile Insurance Policy?
Auto insurance policy limits are generally expressed as two numbers. When reading liability limits under an automobile insurance policy, the first number is generally the maximum amount that any one person involved in the accident can receive under the policy.
The second number represents the maximum amount that the insurance company is liable to pay in the aggregate to all injured persons from the motor vehicle accident.
If the at-fault party has a $250,000/$500,000 liability limit on their auto policy, a policy limits settlement would be for $250,000.
What Happens If The Injured Party Has UIM or UM Coverage?
Unfortunately, sometimes the at-fault party’s insurance is not sufficient to fully compensate the injured party for their injuries or a wrongful death claim. An attorney can determine if the injured party’s own automobile insurance policy will help cover the difference through “Underinsured Motorist” (UIM) or “Uninsured Motorist” (UM) coverage.
As the name suggests, Underinsured Motorist coverage protects you if the at-fault party is underinsured (does not have enough coverage to fully compensate you for the injuries).
Uninsured Motorist coverage protects you if you are hit by an uninsured driver. If you are hit by an uninsured driver and do not carry Uninsured Motorist coverage, there may be no financial coverage available to protect you, and you must seek any recovery from a lawsuit directly against the other party.
If you do not carry UM and UIM coverage on your vehicle, then you are putting yourself and your family at risk every time you travel in your car.
The only way to know the policy limits on any particular insurance policy is to examine the terms of the subject insurance policy.
Contact Us To Know More About Policy Limits Settlements
Our Philadelphia Personal Injury lawyer has extensive experience in pursuing policy limits settlements. To schedule a consultation, call our Philadelphia office at (215) 464-4600 or contact us online. Follow us on Facebook to get more information.
Frequently Asked Questions
What Is The Policy Limit Demand In A Personal Injury Case?
A “policy limit demand” in a personal injury case requests the insurance company pay the complete policy limits.
Should You Release Your Policy Limits?
Whenever you suffer an accident, you need not disclose your policy limit to the other side without a court order. This ensures that no one will take undue advantage of your policy limits without your permission.