When purchasing a liability car insurance policy, it can be challenging to understand what all the numbers mean, and what types of coverage they offer. Liability car insurance is meant to offer you financial protection if you cause someone else injuries in a car accident.
What Are Car Insurance Policy Limits?
An insurance policy limit is usually the maximum amount your insurance will pay for losses from an accident that is covered by the insurance policy. In insurance policies, it is typically written in this number format – 100/300/50.
- The first number, or 100, represents the maximum amount ($100,000) your insurance would pay for bodily injuries per person, per accident.
- The second number, or 300, represents the maximum amount ($300,000) your insurance would pay for bodily injuries for all people involved, per accident.
- The third number, or 50, represents the maximum amount ($50,000) your insurance would pay for property damage, per accident.
Bodily injury coverage helps to pay for medical bills, lost income, and pain and suffering. Property damage coverage helps to pay for repairing or replacing vehicles and personal property, as well as surrounding property that may have been damaged, such as a street light.
Each state sets minimum insurance coverage policy limits that drivers must purchase in order to drive legally. In California, those limits are 15/30/5. However, according to the Wall Street Journal, “minimum coverage isn’t necessarily all you should have. . .You’re on the hook when costs exceed your coverage limits.”
How Policy Limits Affect Personal Injury Cases
Generally speaking, under a car insurance liability policy, the insurance company only has to pay up to the limit of the at-fault driver’s insurance for injuries and property damage. So if the policy coverage was $100,000 for bodily injuries but the injured person’s medical bills totaled $1,000,000, the insurance company is only liable for the $100,000 limits. That could leave the at-fault driver open to the excess $900,000 of liability, which is why having higher insurance policy limits can be helpful.
Getting Recovery Above The Policy Limits
There are some circumstances in which an injured victim can recover compensation above the at-fault party’s policy limits. One example is when the insurance company is acting in bad faith, or not upholding its duty to its policyholders by delaying in handling claims, refusing to settle, refusing to investigate, and refusing to defend a lawsuit, among many other deceptive actions. In that situation, the policy limits would no longer apply. There may also be other defendants to hold liable with their own insurance, umbrella policies providing extra coverage, or your own underinsured motorist coverage that could provide recovery.
Call PARRIS To Handle Your Insurance Claim For You
Recovering compensation through an insurance claim can be a complicated process. There may be many parties at fault, all with various insurance policies and different types of coverage. In order to maximize your recovery, you will want experienced attorneys on your side. PARRIS accident attorneys have been fighting insurance companies since 1985. All of our cases are handled on a no win no fee basis, which means that you pay no fees until you recover compensation. Call (661) 485-2072 to start your free case consultation today.