(This article is meant to be read in conjunction with the last blog article entitled “QUICKIE INSURANCE PRIMER”)

Many times in personal injury cases you will hear lawyers say things like “How much is the policy”, or “They paid the policy”, or (one of my favorites) “The verdict was in excess of the policy”.

What does all this mean and why is it important?

Knowing the at-fault driver’s (or person or corporation’s) insurance policy limits can be one of the most important pieces of information needed to figure out what will happen with your personal injury case, wrongful death case, etc.

Policy limits, stated quite simply, is the amount of insurance purchased by the person or entity you are suing or whom you have a claim against. In most circumstances, an insurance company will never pay more money than the amount of insurance that their insured purchased, no matter how serious your injuries are. Let’s look at an example.

The minimum amount of car insurance that can be purchased in California is $15,000, which usually looks like this on your insurance declaration sheet: 15/30/5.

For example, if a motorist is injured by the fault of another driver who is insured with only 15/30/5, and sustained $20,000 in medical bills, $5,000 in wage loss, and $7,500 in damage to their car, the most they could get from the at-fault driver’s insurance company would be $15,000 for the injury case (medical bills, wage loss, and pain and suffering), and the most they could get for the property damage to the car would be $5,000.  

In that last example, the “policy limits” would have been paid out, but the results for the injured person would not be great.

Knowing what the policy limits are, and the various nuances that surround “policy limits”, is something all good personal injury lawyers understand.

It is also important to know how and when the “policy limits” are open. This is a subject all on its own, but the basic premise is that in some select situations, an insurance company can be forced to pay more than the amount of insurance purchased by their insured.

For example, a traumatic brain injury case that I took to trial involved a wonderful young woman who was a back seat passenger in a truck that crashed into a telephone pole. She had been trying to get her seatbelt on when the driver took off and crashed. She went flying and hit her head on the rear view mirror and windshield, suffering a concussion.

The driver of the truck carried 100/300; meaning the most my client could recover was $100,000, unless somehow the policy limits were opened.

In this case the insurance limits were properly opened (a good personal injury lawyer knows how to open the limits). The case was taken to trial, the verdict was approximately $700,000, and the at-fault driver’s insurance company did end up paying the full verdict, even though it was more than the amount of insurance purchased by their insured.

Even a case with horrible injuries is not worth much if there is not a source to pay the settlement or verdict. For example, if a life-long criminal steals a car, drinks a 5th of Vodka, and crashes into a poor family, the chances of recovering money from the criminal could be slight, because you “cannot squeeze blood out of a turnip”, as the old saying goes.

There are also situations where the policy limits are being offered in settlement, but there may be other insurance policies available. A good personal injury lawyer knows when to settle for policy limits, and when to investigate to try and find additional insurance.

The bottom line is that if you have suffered a serious personal injury, insurance policy limits, under-insured motorist coverage, or the existence of more than one insurance policy, becomes vitally important.

Sometimes it just comes down to experience when figuring this stuff out, and sometimes it comes down to proper investigation and digging. In any case where policy limits are an issue, this office makes every effort to either get the case settled for policy limits, find additional insurance, or help guide you when making an often tough choice regarding whether to settle or take your chances at trial.

If you have been seriously injured and you need to ask questions regarding insurance policy limits or your case, please contact the Law Office of Adam Sorrells at 530-893-9900, or at www.chicopersonalinjury.com.


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