When someone gets hurt in an accident, it’s easy to think that the insurance of the person at fault will cover all of their losses. It seems like you should fully pay for medical bills, lost wages, and pain and suffering. In truth, every insurance policy has a limit built in. Policy limits are the highest amount an insurance company will pay on a claim. This number is often the most important thing in personal injury cases with policy limits, no matter how bad the injuries are.
What Liability Coverage Does
Liability coverage is the part of an insurance policy that pays for damage done to other people. The maximum amount that each policy will pay per person and per accident is listed. The insurance company’s duty ends when that amount is reached. The insurance company doesn’t have to go above and beyond those limits, even if the injured person needs medical care for years or can’t work anymore. This is when compensation caps come into play, especially in cases of serious injury where damages go well beyond basic coverage.
How Limits Affect Your Claim
Costs can quickly go over the amount of liability coverage you have when injuries are bad. Long-term care, surgery, and rehabilitation can all add up to losses that are much higher than the policy’s limit. The settlement can’t go over that limit unless another policy applies or someone else is also responsible. Insurance companies know this and use it a lot in negotiations. They will often make the policy maximum their last offer, even if it is less than the real damages. Knowing these limits early helps you set expectations and plan your strategy, such as whether there might be other ways to get money back.
Questions and Answers
What are the limits on policies for personal injury claims?
The most an insurance company will pay under a certain policy is these amounts.
Does liability insurance always cover all damages?
No. It only pays up to the limits set by the policy, even if the losses are higher.
Is it possible for a settlement to go above the limits set by the policy?
Only when other insurance policies or people who are responsible are involved.
Why do limits make negotiations harder?
Insurance companies use compensation caps to limit payouts and set the terms of settlements.
How do I find out what the policy limit is?
Usually, it is revealed during the claims process or through a formal request.
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