An insurance company is there to resume responsibility for an injury case. Whether it is medical malpractice or a car insurance claim, they handle claims filed against their insured. Then, the insurance company pays out costs of damages and legal fees that are agreed in a settlement or awarded during a trial. Insurance companies only pay out based on the policy limit. Therefore, it is important for accident victims to understand how policy limits work, and what their options are if they must collect beyond a person’s policy limit.
When someone purchases insurance, there is a liability limit attached to that policy. This is the maximum amount the insurance company pays for. For example, a car insurance policy has a limit of $25,000. If a claim is filed against that policy, the insurer only pays $25,000. The insurance company does not pay past the limits of the policy. Instead, that money must come from someone else.
Excess damages are those that exceed policy limits. There are ways for a plaintiff to collect excess damages, such as:
In an incident, there may be more than one responsible party. In this case, each defendant’s insurance policy limits would be used to pay damages. Some examples where multiple defendants may occur include:
Some defendants have umbrella policies. This is especially true when the defendant is a business. The umbrella policy would kick in after the initial policy limits are exceeded. Then, the umbrella policy can be accessed up to its limits.
This is not only possible, but if the defendant has significant assets or cash, the remaining damages are collected from them personally.
In some cases, a judge may issue a wage garnishment or place a court lien on the defendant’s property. If there are no assets, however, there may be no options for recovery.
If you want to receive maximum compensation, you must contact an attorney. An attorney will review policy limits, potential umbrella policies, and ensure all defendants are listed in the suit. This ensures that you receive the compensation you need to fully recover from your injuries and damages.