Do Insurance Policy Limits Matter in Personal Injury Cases?

Insurance policy limits

YES! Insurance policies and their limits play a HUGE role in personal injury cases. In personal injury lawsuits, the at-fault party’s insurance company assumes  financial responsibility for injuries and other damages resulting from the accident. However, insurance companies only pay out to the at-fault party’s policy limit. And unfortunately, that is not always enough to cover the victim’s losses. 

To better understand the role insurance policy limits play in personal injury cases, let’s first look at how insurance policy limits work. Then, we’ll explain how to collect compensation beyond the insurance policy limits. 

The role of insurance policy limits in personal injury cases

When an individual or business purchases an insurance policy, the insurer will limit how much it will pay to settle any claims against you. This is your policy limit or limit of liability, which depends on how much insurance coverage was purchased. 

For instance, if you are in a car accident with an individual who purchased an auto insurance policy with a $50,000 limit, the insurer will pay up to $50,000 to cover your injuries or any damage to your vehicle. The insurance will not cover any damages that exceed that amount. 

But, the good news is it is possible to collect compensation beyond the defendant’s insurance policy limits. 

Collecting compensation beyond insurance policy limits

Here are four ways to collect damages beyond the insurance policy limits: 

  1. File suit against additional defendants. Oftentimes, multiple parties can be considered legally and financially responsible for an accident. For instance, if you are involved in an accident with a commercial vehicle, the driver and his employer may be held liable. If each defendant had an insurance policy limit of $50,000, both of those defendant’s policies could be used to cover your damages.
  2. Recover damages under an umbrella policy. An umbrella policy is a type of personal liability insurance designed to kick in when the policyholder faces liability in excess of his original policy limits. Umbrella policies are common among corporate or business defendants, but some private individuals may have them, too. If the defendant in your personal injury case has an umbrella policy, there may be more than one insurance company or policy that can cover your damages. It’s important to do your research to uncover all of the insurance policies that may be in play to collect compensation in excess of the original policy’s limit. 
  3. Collect from the defendant personally. In some situations, the only course of action is to collect excess damages directly from the defendant. This can be especially difficult to do if the defendant does not have cash or assets to pay you. In these cases, the damages in excess of the policy limits are basically uncollectible.
  4. Use underinsured motorist coverage. Underinsured motorist coverage (UIM) provides additional coverage for the policyholder when the at-fault driver doesn’t have enough (or any) liability coverage. Essentially, if the at-fault party’s policy has a limit below the cost of the damages, the injured party’s underinsured motorist coverage would cover any excess damages. While it costs more to add to your policy, it can save you from having to pay out of pocket for a car accident that you didn’t cause. 

Are you burdened with damages that exceed insurance policy limits? 

If you’re burdened with damages that exceed the insurance policy limit, hire a personal injury attorney to fight for you. A personal injury attorney can help you determine if you can file a suit against additional defendants, recover damages from an umbrella policy, or collect from the defendant directly. Pursuing a personal injury claim is not a simple process, and it is smart to have an experienced attorney on your team. Be smart, and call Mark! 

Call Mark Petro of Petro Accident and Injury Attorneys

Mark Petro has built a reputation of being the go-to guy to get personal injury claims handled in a manner that maximizes the amount of recovery so that you get what you deserve sooner rather than later. Call Mark Petro of Petro Accident and Injury Attorneys for a free consultation about your case. Let us fight for you!