I have heard about people seeking "policy limits" in car wreck cases. What does that mean?
"Policy limits" refers to the sum total of liability insurance policy dollars that are applicable to a given case.
So, if a person has $300,000 of insurance on their car and they cause a wreck that injures someone else, a policy limits demand by the injured party is a demand that the insurance company pay $300,000 to settle the case.
It means that for any one car wreck that is the fault of another driver who does not have any insurance your insurance company will pay you up to $50,000 in losses and damages you suffer. If more than one person in your vehicle is injured in the wreck, the company will pay up to $100,000 to all of the persons in your vehicle who were injured and covered under the policy but no more than $50,000 for any one person.
Note that each person who is injured does not automatically get $50,000 – they must demonstrate amount of their damages and can recover up to $50,000 each.
Your policy also provides your protection if the at-fault driver was underinsured. For example, assume that the driver that hit you was from another state and had a liability insurance policy that provided the driver $10,000 / $20,000 in liability insurance coverage. That means that for any one car wreck that was the other driver’s fault his insurance company will pay a person injured in the wreck up to $10,000 in losses and damages they suffer. If more than one person is injured in the wreck, the company will pay, on the at-fault driver’s behalf, up to $20,000 but no more than $10,000 for any one person.
It means that for any one car wreck that is the fault of another driver who does not have any insurance your insurance company will pay you up to $250,000 in losses and damages you suffer. If more than one person in your vehicle is injured in the wreck, the company will pay up to $500,000 to all of the persons in your vehicle who were injured and covered under the policy but no more than $250,000 for any one person.
Note that each person who is injured does not automatically get $250,000 – they must demonstrate amount of their damages and can recover up to $250,000 each.
Your policy also provides your protection if the at-fault driver was underinsured. For example, assume that the driver that hit you had a liability insurance policy that provided the driver $100,000 / $300,000 in liability insurance coverage. That means that for any one car wreck that was the other driver’s fault his insurance company will pay a person injured in the wreck up to $100,000 in losses and damages they suffer. If more than one person is injured in the wreck, the company will pay, on the at-fault driver’s behalf, up to $300,000 but no more than $100,000 for any one person.
I live in Tennessee. I was in a car wreck in Nashville and got hurt. It was the other driver’s fault. The other driver has no insurance. I looked at my automobile insurance policy and it says that I have uninsured motorist insurance of $25,000 / $50,000. What does that mean?
It means that for any one car wreck that is the fault of another driver who does not have any insurance your insurance company will pay you up to $25,000 in losses and damages you suffer. If more than one person in your vehicle is injured in the wreck, the company will pay up to $25,000 to all of the persons in your vehicle who were injured and covered under the policy but no more than $50,000 for any one person.
Note that each person who is injured does not automatically get $25,000 – they must demonstrate amount of their damages and can recover up to $25,000 each.
I live in Tennessee. I was in a car wreck in Nashville and got hurt. It was the other driver’s fault. The other driver has no insurance. I looked at my automobile insurance policy and it says that I have uninsured motorist insurance of $100,000 / $300,000. What does that mean?
It means that for any one car wreck that is the fault of another driver who does not have any insurance your insurance company will pay you up to $100,000 in losses and damages you suffer. If more than one person in your vehicle is injured in the wreck, the company will pay up to $300,000 to all of the persons in your vehicle who were injured and covered under the policy but no more than $100,000 for any one person.
Note that each person who is injured does not automatically get $100,000 – they must demonstrate amount of their damages and can recover up to $100,000 each.
I was in a car wreck yesterday. It was probably my fault. I looked at my automobile liability insurance policy and it says that I have liability limits of $250,000 / $500,000. What does that mean?
It means that for any one car wreck that is your fault your insurance company will pay a person injured in the wreck up to $250,000 in losses and damages they suffer. If more than one person is injured in the wreck, the company will pay, on your behalf, up to $500,000 but no more than $250,000 for any one person.
So, if one person was hurt in the wreck, the insurer will pay no more than $250,000 in damages. If two people were hurt, the insurer will pay up to $500,000, but no more than $250,000 per person. If three people were hurt, the insurer will pay up to $500,000, but no more than $250,000 per person. Note that each person who is injured does not automatically get $250,000 – they must demonstrate amount of their damages and can recover up to $250,000 each.
I was in a car wreck yesterday. It was probably my fault. I looked at my automobile liability insurance policy and it says that I have liability limits of $300,000. What does that mean?
It means that for any one car wreck that is your fault your insurance company will pay a person injured in the wreck up to $300,000 in losses and damages they suffer. This is true whether one person is injured or five people are injured: the most the insurance company will pay is $300,000.
To the extent that a person injured in the wreck has claim worth more than $300,000 you are personally responsible for the amount of damages over $300,000 if the wreck was your fault. Likewise, if more than one person is injured and the total damages caused by your negligence exceeds $300,000, you are personally responsible for the amounts over $300,000.
I was in a car wreck yesterday. It was probably my fault. I looked at my automobile liability insurance policy and it says that I have liability limits of $25,000 / $50,000. What does that mean?
It means that for any one car wreck that is your fault your insurance company will pay a person injured in the wreck up to $25,000 in losses and damages they suffer. If more than one person is injured in the wreck, the company will pay, on your behalf, up to $50,000 but no more than $25,000 for any one person.
So, if one person was hurt in the wreck, the insurer will pay no more than $25,000 in damages. If two people were hurt, the insurer will pay up to $50,000, but no more than $25,000 per person. If three people were hurt, the insurer will pay up to $50,000, but no more than $25,000 per person. Note that each person who is injured does not automatically get $25,000 – they must demonstrate amount of their damages and can recover up to $25,000 each.
I was in a car wreck yesterday. It was probably my fault. I looked at my automobile liability insurance policy and it says that I have liability limits of $50,000 / $100,000. What does that mean?
It means that for any one car wreck that is your fault your insurance company will pay a person injured in the wreck up to $50,000 in losses and damages they suffer. If more than one person is injured in the wreck, the company will pay, on your behalf, up to $100,000 but no more than $50,000 for any one person.
So, if one person was hurt in the wreck, the insurer will pay no more than $50,000 in damages. If two people were hurt, the insurer will pay up to $100,000, but no more than $50,000 per person. If three people were hurt, the insurer will pay up to $100,000, but no more than $50,000 per person. Note that each person who is injured does not automatically get $50,000 – they must demonstrate amount of their damages and can recover up to $50,000 each.
I live in Tennessee and I understand state law requires that everyone who owns a car or truck have liability insurance coverage on the vehicle. Why should I spend money to purchase uninsured motorist insurance coverage if everyone already has liabilty insurance?
Because (a) some people don’t follow the law; (b) some people buy liability insurance coverage but do not purchase an amount that will protect you from losses you sustain in a car or truck wreck; and (c) you may get hit by a hit-and-run driver (and unisured motorist coverage gives you some protection in such cases).
Despite the law that mandates insurance coverage, 20% of the people in Tennessee have no insurance on their vehicle. That means that 1/5th of the people you meet on the highway have virtually no way of meeting their financial obligation to you if they cause an accident and you are hurt. You need uninsured motorist coverage to protect you from that risk.
Tennessee Injury Law Center