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Rhode Island Personal Injury Attorney / Blog / Personal Injury / How Does Insurance Policy Limits Affect Your Accident Case?

How Does Insurance Policy Limits Affect Your Accident Case?

Limits

Insurance plays a vital role in helping you get compensated for your injuries. The Defendant’s insurance is often the actual entity that pays whatever settlement or judgment that you reach with the Defendant.

But every now and then, you may hear an attorney concerned that the other side has a small policy, or that the limits of the Defendant’s policy are very small. Practically, how does that affect your injury case?

Understanding Policy Limits

As you may already know from whatever insurance policy you have, there is a maximum amount that someone is insured for a loss—a loss, in this case, being what someone may owe you for injuring you in an accident.

As a victim, you want the other person or business to have as large of an insurance policy as possible. That means that insurance will be able to cover more of your injury if you are injured.

In some cases, such as if you have a very minor injury, even a small insurance policy will be sufficient to cover your losses. In other cases, such as with large companies, it may not matter what the limits of their insurance is, because they are a large company, capable of paying any kind of settlement or jury verdict, even if the amount they owe exceeds what their insurance policy is.

But it does happen that a victim’s injury or damages are way more than what the Defendant’s insurance policy limits are. What happens then?

Collecting Against the Defendant Over and Above the Policy

Legally, you can collect the limits of the policy from the insurance company and then pursue the Defendant individually for whatever amounts that are owed to you which may exceed the policy limit.

But there are practical problems with this. The primary problem is that if you are seeking to settle your case, most insurance companies will only settle for you, on the condition you agree not to pursue their insured for the rest of your damages.

So, for example, if your damages are valued at $200,000, but there is a $100,000 insurance policy, and the insurance company agrees to pay that $100,000, they will only agree to do so, on the condition that you do not pursue their insured (the Defendant) for the remaining, unpaid $100,000.

What About Court?

You can certainly opt not to settle, but rather, to go to court, try to get your $200,000 verdict from a jury, and collect against the insurance company, and then, pursue the Defendant individually, for whatever part of the verdict insurance doesn’t cover.

But that will require you to take your case all the way to trial—and, there is no guarantee that the Defendant, if an individual, has the assets to pay whatever part of your judgment that the insurance policy doesn’t cover.

Contact our Rhode Island personal injury lawyers at Robert E. Craven & Associates at 401-453-2700 today to help figure out the insurance issues in your injury case.

Source:

allstate.com/resources/what-is-a-limit

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