Accidents

You've sustained injuries in an accident where someone else was at fault. You know the at-fault party has insurance, but you don't know how much. Although your injuries are serious and your treating doctors have agreed to provide testimony on your behalf, you would prefer to settle your personal injury claim with the insurance company rather than go through a prolonged court proceeding. But can a reasonable settlement be reached?

Insurance companies assume responsibility in a wide variety of personal injury cases, from car insurance claims to medical malpractice to premises liability. When an insurance company is responsible for handling a claim filed against its insured, the insurance company usually pays out both legal fees and the cost of damages that are either awarded by a jury or agreed upon in a settlement. However, insurance companies generally only pay out to the policy limits. In this article we'll explain how policy limits work, and how you might be able to collect compensation beyond those limits.

Even though the slip and fall victim has far less in damages than the auto accident victim in the above example, their respective settlements may well be affected by the amount of insurance coverage maintained by the grocery store's owner and the driver of the at-fault vehicle.

When an individual buys liability insurance, there is essentially always a policy limit in place. This refers to the maximum amount of money the insurance company is responsible for. For example, if you buy a car insurance policy that has a $50,000 limit, the insurance company is going to pay out only $50,000. If there are $100,000 in damages, then the insurance company isn't going to pay the excess $50,000. This money, if awarded by a judge or jury, will have to come from somewhere else.

There are a few possible ways that a plaintiff may collect damages in excess of insurance policy limits. These methods include:

• bringing  a lawsuit against additional defendants
• recovering under an umbrella insurance policy, and
• trying to collect from a defendant personally

The appropriate method of recovering damages will depend on the situation and what options are available to the plaintiff, but let's take a closer look at these three options.

Sometimes, more than one party can be held legally and financially responsible for an accident. In many such cases, the different defendants may be said to be "jointly and severally" liable for the whole amount of damages. This would mean that if there were two defendants and each had a policy limit of $50,000, both of those defendant's policies could be used to pay the bills.