How Do Policy Limits Affect My Car Accident Compensation?

Every auto insurance policy has limits on how much the insurer will pay in the event of an accident. For accidents that result in serious injury, the compensation you collect from the insurance company may not be sufficient for your damages.

Understanding how policy limits can affect your car accident compensation can help you determine whether you should file a lawsuit against the at-fault driver.

How Do Insurance Policy Limits Work?

Most auto insurance policies provide bodily injury and property damage coverage. Bodily injury coverage has two limits with the first being what the insurer will pay for one person’s injuries. The second limit is imposed on what the insurer will pay for all the injuries sustained in one accident.

These policies contain a separate limit for property damage. You are not permitted to exceed the limits for each one and they can’t be used interchangeably. In other words, you can’t use the unused amount for vehicle damage to cover your injuries and vice versa.

Can I Collect Additional Damages?

Even with policy limits, it is possible to sue beyond those limits. It’s generally best to look at the other ways to cover your damages.

Check for an Umbrella Policy

In some cases, a defendant may have an umbrella policy that will allow you to collect additional damages. This is common in truck accident cases where a trucking company is involved.

Cases with Multiple Defendants

Some accidents involve multiple vehicles. If all the other drivers involved were found liable, you may be able to recover additional damages from each of these policies.

Insurance Company’s Acts of Bad Faith

While it doesn’t happen often, some insurance companies deny a claim even though it should be approved. It is bad faith if the insurer refuses to provide a reasonable settlement that falls within the policy limits. Taking the case to trial could mean that a jury awards damages much greater than the limits.

How Much Can I Sue for My Car Accident Compensation?

In most cases, you can sue for up to the policy limits provided by the at-fault driver’s insurance coverage. You can also collect additional compensation by other avenues, as mentioned above. Medical bills quite often exceed these limits, and it’s why underinsured motorist coverage can be beneficial in these situations.

Still, if you have suffered injuries in a car accident, claiming compensation for your injuries will be a smoother process with a lawyer. An experienced personal injury attorney on your side can help you negotiate for maximum compensation.

Often, the insurance companies will offer a settlement amount that does not account for your non-economic damages. Serious injuries require serious amounts of money for ambulance rides, hospital stays, surgeries, physical therapy, medications, and making accommodations in your home to help you adjust to your condition in the aftermath. An attorney can help you fight for what is fair to prevent you from drowning in debt due to someone else’s carelessness.

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Libby Austin

Libby Austin, the creative force behind, is a dynamic and versatile writer known for her engaging and informative articles across various genres. With a flair for captivating storytelling, Libby's work resonates with a diverse audience, blending expertise with a relatable voice.
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