Policy Limits and How They Affect Your Injury Case

When you see an attorney about your injury case, one thing that the attorney will look for and inform you about, is the other side’s insurance policy, and their policy limits. But what is this, or more specifically, why and how does it impact a personal injury case, and what may happen in your case?

What are Policy Limits?

Insurance policy limits are the maximum amount that an insurance company will pay out on a claim, in this case, a claim being the one you bring against the negligent defendant. When the Defendant is a large company, policy limits usually don’t mean much. The company has enormous policy limits, and significant assets even beyond the policy to satisfy whatever settlement or verdict that may be entered against it.

Policy limits do become an issue, when there is an individual on the other side of the case. This is common in car accident cases, or if you’re suing an individual for an injury in their home, or an injury sustained on their property.

Affects on Your Injury Lawsuit

When you sue someone, their insurance company will not only pay for their lawyer, but will also pay whatever settlement or verdict is entered against the insured Defendant—at least, up to the policy limit.

If your injury’s value is well below the policy limit, there is no real issue. Insurance will pay whatever the Defendant ends up owing you.

But many people drive around with very small insurance policies—much smaller than what is needed to compensate a victim in a serious accident.

When you sue someone with a smaller policy, the insurance company may simply offer the entirety of the insurance policy near the outset of the case. That’s good, except for two problems.

The first is that the policy is likely so small, that it doesn’t fully compensate you considering the severity of your injuries.

The second problem is that if you do accept the policy limits, the insurance company will also want you to waive your right to sue the Defendant, individually. In other words, the insurance policy is the sum maximum total of everything that you will be able to get.

Pursuing the Negligent Defendant

You can refuse to waive the Defendant’s liability. However, then you would usually have to take your case all the way to trial.

Again, whatever you get from a jury wouldn’t matter—the insurance company still only has to pay whatever the policy limit is.

You could in theory go after the Defendant, individually, for the amount of the verdict that exceeds the policy limits. But most people who drive around with smaller policies, also have fewer personal assets, or salary, to collect on.

You are then left in a position of having to find and locate assets, and collect on them. Federal and state law also limits how much of someone’s salary you can take to satisfy your judgement. The reality is that you may never be able to collect whatever amount the Defendant owes above and beyond the policy.

What are the policy limits in your injury accident case? We can help. Call the Tampa personal injury lawyers at Barbas, Nunez, Sanders, Butler & Hovsepian today for help.

Sources:

progressive.com/answers/insurance-limits/

findlaw.com/consumer/insurance/understanding-insurance-limits.html