Various personal injury accidents can happen at almost any time. When these accidents happen, it’s likely that you will suffer injuries and property damage, as well as incur accident-related expenses. With medical bills to pay along with other expenses, how do your insurance policy limits come into play? You need a qualified Michigan personal injury attorney to review your insurance coverage to ensure you get a fair settlement. For help with your policy limits settlement, you need the insurance lawyers at Lipton Law on your side. We hold insurance companies accountable for bad faith claims and defend the rights of policyholders. Call our law firm today at 248-557-1688 to schedule your free consultation with us.
Policy Limits Settlements and How They Affect Your Personal Injury Claim
It’s important to understand your insurance policy limits, especially after an accident. Your policy limits partially determine how much you can collect for personal injury compensation. When you need to obtain financial relief for medical bills, property damage, and other expenses, how can you accomplish this? What if you need to collect excess damages outside of your policy limit?
Our attorneys are here to explain how policy limits work, as well as what you should include in your policy limits demand letter. Read on to learn how you can collect personal injury damages from your insurance company.
What Are Policy Limits in Insurance?
Insurance policy limits are relatively simple. Basically, policy limits tell you how much your insurance will pay for certain types of claims. In most cases, if your damages exceed your policy limit, you will be responsible for the excess amount. While many people can choose their policy limits, some states have minimum requirements for liability insurance or even underinsured motorist coverage.
In fact, most states require a certain minimum amount of auto insurance coverage. When you purchase insurance, your policy must meet the accepted minimum or exceed it for the legal limits of your state. Common insurance coverage that has legal limits includes the following.
- Underinsured motorist coverage
- Liability insurance
- Personal injury protection
- Certain states require medical malpractice insurance for doctors
Policy limits often vary depending on the types of insurance policies and the requirements in your state. However, all policies have an upper limit of some kind.
How Do Insurance Policy Limits Work?
Your policy limits are listed on the declarations page of your insurance policy information packet. The declarations page is one that outlines and summarizes your policy and its coverage. It contains all relevant information about your policy, including the following.
- Policy number
- Name of the insured (you)
- Name of the insurance carrier and insurance agent, as well as contact information
- Your policy limits
- Your deductible, which is the amount you must pay out of pocket before the insurance company will help with medical costs or other payments.
- The insurance premium, which is the amount you pay for your policy
Generally, each type of coverage you have will have its own policy limit. However, some limits apply to multiple coverages. When you’re deciding on which policy limit works for you, keep in mind that your state may have minimum requirements. It may be beneficial to speak with an experienced personal injury attorney to better understand your policy after an accident.
Types of Policy Limits
There are many different types of policy limits. Some are preferable to others for certain people. Examine the different policy limits available to you, and choose the one that works best for your individual needs. Below, we outline some of the most common types of policy limits.
- Per-person limits
- Per-occurrence limits
- Split limits
- Aggregate limits
- Combined limits
- Special limits
How Do Insurance Limits Affect Settlements?
Let’s say someone other than you causes a Michigan car accident that you’re involved in. You have suffered injuries and property damage to your vehicle. You’ll also need to take time off of work for your injuries to heal. How does your policy limit affect your settlement amount in this case?
First off, your insurance company is responsible for giving you a reasonable settlement offer within your policy limit. Good faith insurance practices require a fair offer, but the settlement offer shouldn’t exceed the limits of your insurance policy.
However, insurance companies exist to make a profit, not to protect every single policyholder from losses. If you sent a reasonable settlement demand letter that your insurer rejected, you might have the basis for a bad faith claim.
Fortunately, most settlement demands are deemed reasonable by the insurance carrier. Thus, a reasonable insurance company will accept the policy limits settlement demand. Most personal injury cases settle claims without the need for a trial.
How Often Do Auto Accident Settlements Exceed Insurance Limits?
It is very unusual for an insurance company to give a settlement offer that exceeds the policy limit demand letter. However, every situation is unique. We recommend speaking with a qualified personal injury lawyer about your case. The attorneys at Lipton Law will always protect the insured’s interests above all else. This is especially important for severe accident cases, such as those involving a wrongful death claim.
Can I Recover More Than the Insurance Limits?
As we stated before, it is unusual for an insurance company to offer a settlement that exceeds the policy limit demand. However, this does not mean that the expenses for the victim’s injuries simply won’t be covered. There are other ways to collect injury compensation beyond your limits.
Options for Recovering More Than the Policy Limits
If you have medical treatment bills, lost wages, and property damage that exceed your policy limits, it may be time to explore other options for recovery. Below, we outline a few ways you can use the settlement negotiation process to your advantage.
Sue the At-Fault Driver
Maybe the damage done in the accident is worth more than your policy limit. In this case, you might be able to sue the at-fault driver for the remaining amount. However, we recommend speaking with your attorney first. It is possible that the at-fault driver does not have the means to cover the liability claim you file against them.
File a Bad Faith Claim Against the Insurance Company
You can also file an insurance bad faith claim against your insurance company. When an insurer fails to settle in good faith, they may be liable for a bad faith claim. Bad faith insurance practices often involve cases where an insurance company refuses to give a fair settlement offer. If your insurer failed to give you a fair offer, you might have a case.
Sue Other Parties
Maybe your accident involved multiple people, and they were all somewhat responsible for the damages. This means you can file claims under more than one person’s insurance policies.
Collect Under an Umbrella Policy
Sometimes, accidents happen that involve a corporation’s vehicle. These vehicles often have umbrella policies that you can file a claim under. The umbrella policy may not kick in until you have exhausted other policies’ limits. Speak with an attorney if you were involved in a commercial vehicle accident.
What Can You Get From a Policy Limits Demand to an Insurance Company?
There are a few key elements you’ll want to include in your demand letter to the insurance company. We list these below.
- A description of the accident in as much detail as possible.
- Descriptions of your injuries and other damages.
- Your policy limits, the limits of others involved, and the reasoning why probable liability could award you an excess judgment.
- A reasonable settlement demand letter.
If successful, covered claims could receive coverage for the following losses.
- Medical expenses
- Property damage
- Lost income
- Pain and suffering
- Other related losses
How Do I Know if My Policy Limits Are Enough to Cover an Accident?
It’s important to understand how to review your insurance policy. It is equally as important to review your policy on a regular basis. Unfortunately, many drivers never look at their policies again until after they’ve been in an accident. Speak with a qualified attorney to ensure that you understand the limits of your policy.
We recommend looking at the declarations page of your policy. This is where you’ll find the most relevant information. Once you have reviewed your limits, you can work with an attorney to determine the extent of your damages. This is the simplest way to determine whether you have enough coverage for an accident.
How Can an Attorney Help in My Insurance Policy Limits Claim?
An insurer’s duty is to engage in fair dealing with their policyholders. Unfortunately, this is not always the case. Our attorneys can work with you to determine your options for obtaining compensation after an accident. We will do this in the following ways.
- Reviewing your insurance policy or the policies of the other parties involved in the accident
- Determining whether your insurance company is acting in bad faith
- Writing a settlement demand letter on your behalf, then sending it to the insurer
- Arguing in favor of your demand letter
- Taking your case to court if necessary
Contact An Insurance Dispute Lawyer With Lipton Law Today
At Lipton Law, we aren’t like other law offices. We value each attorney-client relationship very highly. Not only do we provide personalized attention to our clients, but we always prioritize what is best for your case. If you were in an accident and you’re struggling to obtain a fair settlement, we’re here to give you the edge you need. To schedule a free consultation with us, please call 248-557-1688 today.