Do Insurance Policy Limits Matter in Personal Injury Cases

Do Insurance Policy Limits Matter in Personal Injury Cases


Did you suffer injuries in an accident and the person who hit you doesn’t have enough insurance to cover your damages? It’s a common occurrence. Check out this video for some information on why insurance limits matter in personal injury cases.

Hey everyone, Barry with the LawFull channel. I’m a personal injury attorney in Chicago, Illinois. On this channel I am trying to share as much free legal information as I can. So, if you haven’t already, please subscribe to the channel and if you have any questions, put them in the comments section below. If I can’t help you I’ll find someone who can.

Alright so do insurance limits matter in personal injury cases is what we’re talking about today and the quick answer is, if you get in an accident, the amount of insurance there is could play a big part in how your personal injury settlement is determined.

So, when someone calls my office and starts to tell me about an accident they were involved in, I generally am focused on three main questions:

a. Who is at fault for the accident?
b. Were there any injuries?
c. Is there insurance?

So very quickly – fault is important obviously because if the caller is at fault, there’s not going to be a recovery

Injuries are important because as a personal injury attorney, I help people recover for their injuries. As a general rule, pi attorneys don’t take property damage cases. We are looking for cases where there are injuries and medical bills.

But these two issues are moot, they’re totally irrelevant if there is no insurance.

If there’s no insurance, there is no one to file an insurance claim with. You can sue the person who caused your injuries, but chances are if the person doesn’t have insurance, he doesn’t have any assets and won’t be able to pay you even if you win your case.

But let’s say you get hurt and there is insurance – why do the insurance policy limits matter?   And when I say policy limits, what I mean is, this is the maximum amount you can recover from the insurance company.

In my home state of Illinois, the minimum amount of insurance you have to have is $25,000. You might have heard it referred to as 25/50 – meaning that the person has a maximum exposure of $25,000 to one accident victim and $50,000 for the whole accident – if there are multiple victims.

Now if you sued this guy and you won $100,000. If he has a $25k insurance policy, then generally speaking, the insurance company is only on the hook for the $25,000. You would have to go after the person individually to collect the balance you won – the extra $75,000. But again, if someone has a $25k insurance policy, it’s like that he doesn’t have a lot of assets to go after.

So you can see that the amount of insurance a driver has is critical in determining how much you may recover. Now – let’s change the scenario a little bit. Say you have a $100k case and the guy who hit you has a $25k insurance policy. If you have underinsured motorist coverage that could change everything. Let’s say you had a UIM policy of  $100k. You could recover the $25k from the defendant and then go after your own policy for the balance owed. That’s why I always tell people to get as much UM and UIM coverage as they can afford.

Finally, what happens if there are multiple people injured in this scenario and the defendant only has a 25/50 policy. Well, in this case, the maximum each of the victims can recover from the defendant’s insurance policy is $25k. And, the defendant’s insurance company is only on the hook for a total of $50,000 – because remember it was a 25/50 policy. After that, the victims would have to go after their underinsured motorist coverage for recovery. This gets a little tricky in a situation where there are 3 or 4 people in the same car who got hit and they’re all going after the same policy to recover because they have to divide it up.

There is one exception to all of this. Sometimes people ask if you can sue an insurance company for more than the policy limits. We were just involved in a case with a former co-counsel of ours. The attorney made an insurance policy limits demand of the insurance company which was denied. Well, the case went to trial and the attorney recovered over $300,000 more than what was demanded. In that case, and again this is the exception not the rule, the insurance company knew it was on the hook and therefore paid the excess judgment as well.

Ok it’s time for your take on the law, where you involved in an accident and the person who caused it didn’t have enough insurance to cover your damages? Tell us about it in the comments section below.

Hey thanks for checking out this video on the importance of insurance policy limits to personal injury cases. Please subscribe to our channel and if you require any assistance, reach out to me. If I can’t help you I’ll try and find someone who can.
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