An important step in a personal injury case is to research insurance policy limits. Obtaining all the details on a client’s policy limits can be time-consuming for attorneys. At Fund Capital America, we provide insurance discovery services so you can focus on more important tasks. Now, we will explain what policy limits are and their significance in any lawsuit.
How Do Policy Limits Work?
By law, a plaintiff can collect damages from an at-fault party if injured in an accident. The defendant’s insurance company usually covers compensation for medical costs, property damage, lost wages, and other losses. But sometimes, the total amount exceeds the maximum coverage available.
The insurance company determines the limits on an insurance policy, based on the type of coverage. With auto insurance, minimum limits are set by state law, but additional coverage can be purchased. Comprehensive and collision coverage limits equal the cash value of a vehicle when an accident occurs.
Limits can be chosen when purchasing coverage for property, which may be a home or business. This requires considering the cost of repairing, rebuilding, or replacing property. The higher the policy limit, the more the premium will be. Furthermore, the insured will have to pay a deductible (as with most types of policies) in a covered claim before insurance kicks in.
Where Do I Find the Limits On a Policy?
Coverage limits are listed in the policy’s documentation. They can also be found by contacting the insurance company directly.
When selecting a policy, it’s important to consider limits and other details. The insured may decide on a policy based on the risk they’re willing to take on, the value of their assets, and their budget.
Can I Receive Compensation That Exceeds Insurance Policy Limits?
It is possible. However, the limit (for example, $50,000 for bodily injury in a car accident) is usually steadfast even if a judge or jury awards a higher amount. To collect excess damages, a personal injury lawyer can negotiate with an insurance company. This often happens after the insurer sends a policy limit demand, which identifies the maximum amount they’re willing to pay on the claim.
If you’re trying to collect damages over the at-fault party’s policy limits, you can:
- Use an Umbrella Policy: An umbrella policy can be purchased to add liability coverage above what the primary policy includes. It kicks in when an at-fault party is liable for damages exceeding the specified amount of the underlying policy.
- File a Lawsuit Against Additional Defendants: Other parties that can be legally and financially responsible for an accident include an employer the victim was driving on behalf of. Another driver, a business in a joint venture, or a manufacturer can be liable as well.
- Collect from the Defendant: If the defendant was the only other party involved in the accident, you can try to collect from them directly. However, most underinsured defendants don’t have assets worthy of collecting, which is why purchasing underinsured motorist coverage is a good idea.
- Claim the Insurance Company Acted in Bad Faith: In California, you can sue an insurance company for unreasonably denying policy benefits, failing to respond promptly, or misrepresenting its policy. Success can mean receiving funds above the policy limits (plus interest) and recovering damages for breach of contract, economic losses, etc.
Get the Facts Straight with High-Quality Insurance Research
The more an attorney knows about a client’s insurance policy, the easier it is to demand a fair and just settlement. The skilled professionals at Fund Capital America fully understand insurance policies, their terms and conditions, policy limits, and how they apply to specific cases. Our insurance research services include every type of policy. For assistance, call 855-870-2274 or submit a request online.