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Jonathan Rosenfeld

November 29, 2021

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Accidents can strike anytime and cause injury, expense, and other harm. These events and the corresponding loss often implicate policy limits (or policy limits) of insurance coverage offered by an insurance company or multiple insurance companies.

How do you obtain the relief and financial compensation afforded within policy limits?

You need to send a policy demand letter containing clear language regarding the accident, injuries, costs, liability, and applicable policy limits or policy limits that the insurance company holds, as well as a settlement demand or at least initiate settlement negotiations.

The following sections review insurance company law from a plaintiff’s counsel perspective. Contact the Rosenfeld Injury Lawyers, LLC law firm, for legal advice or information on these topics.

We can explain the attorney-client relationship within the context of policy limits, including probable liability, settlement demands, how to settle claims or review a formal settlement offer from defense counsel, medical bills or medical costs, and other personal injury damages that followed the victim’s injuries, third party claims, personal injury cases, bad faith claims, etc.

What is a Policy Limit Demand in a Personal Injury Case?

A ‘policy limit demand’ in a personal injury case requests the insurance company to pay the full policy limits or risk their insured’s financial stability.

What are Policy Limits in Insurance Policies?

Policy limits or insurance policy limits are provisions of insurance policies any insurance company sets. The policy limit caps how much compensation or benefits an insurance company will pay in case of a claim payout.

For example, get into a car accident and have a $1 million policy limit. They will only pay that much for your damages (property damage, lost wages, hospital bills, etc.) even if you have losses over and above that amount in a liability claim.

They can do this because every insurance policy is a contract you entered before the incident. Yet, a court held that they only have legal authority if done in good faith-bad faith may nullify them and bring in more covered claims.

However, a bad faith claim must be asserted according to California law (California Supreme Court), Texas law, Illinois law, and most other states.

A bad faith attempt by the insurance company to reject your claim or settlement offer could allow you to collect personal injury damages well beyond the policy limit, and you can work with a personal injury lawyer to try and achieve that excess judgment.

However, the ultimate judgment for the insurer’s failure will be whether or not your claim was a reasonable policy limit settlement offer.

The insurer’s diligence duty is only one of fair dealing. The court explained in many cases that if the insurer failed to accept your offer, the test would be if it was deemed reasonable.

If not, you may file a bad faith lawsuit with a demand letter in the trial court to seek reimbursement and collect excess damages for the insurer’s conduct.

The Insurer’s Duty to Settle Reasonable Claims under an Insurance Policy

As noted before, the insurance company must make a good faith effort to settle after a reasonable offer has been made to them and cannot operate in bad faith regarding insurance policy limits.

Suppose there was a bad faith failure after your settlement demands were made. In that case, you may state a case in court that you did not receive only permissible consideration on your policy limits demands or policy limit demand as granted to you under the law.

In your policy limits demand letter, you must state that the insurer did not negotiate in good faith and absconded their duty to settle and that compliance with the law would have had a substantial likelihood of success.

The insurer’s duty to settle is not unlimited. They can decide to refuse your offer, but they cannot do so out of bad faith

Here are some critical elements to include in your policy limits settlement demand offer of claim to the insurance company:

  • Description of the accident.
  • Nature of your injuries and losses.
  • Applicable insurance policy limits and why probably liability might award you more than the same policy limits.
  • Reasonable settlement demand offer

It would be best to discuss the probable liability of a bad faith insurer with a personal injury lawyer before sending a policy limits demand letter to ensure your policy limits demand is reasonable.

Talk to our law firm about the insured’s liability (or punitive damage exposure), coverage dispute promptly, and the relevant insurance policy.

We can see if the insurer bad faith caused you damages, especially if the insurer rejected the claim outright, and investigate other third parties and liability insurers too.

How an Attorney Can Help in Your Insurance Policy Limits Controversy

But what if the insurer rejects the claim, initially or entirely? In that case, we can work with you and third parties to file a policy limits demand arguing they negotiated in bad faith and probably have liability under the law.

To accomplish that, here are some ways an attorney can assist you:

  • Review the policy limit or policy limits involved in the dispute.
  • Determine if there is probable liability and bad faith in the negotiation process.
  • Write a settlement demand letter and send it to the insurance company.
  • Argue that the policy limits demands have merit and take your case to court if the insurer fails to act reasonably.

We can work with you to review the policy limits at stake and determine if you (or the insured’s interests) have the right to file an action and recover financial compensation against one or more than one party.

What Can You Get from a Policy Limits Demand to an Insurance Company?

What if the insurer violates their duty of good faith to negotiate reasonably and does not give your interests equal weight? They may be exposed to liability far greater than the initial policy limits demand.

To obtain this compensation, you need to proceed against them on the underlying action and then show that they did not operate in good faith about your policy limits action.

Once you succeed, the insurance company may be forced to give you the entire value of your damages judgment, not just the amount of your policy limits.

This could mean that all your medical expenses, lost wages, property damage or destruction, pain and suffering, and other tangible and intangible losses are fully reimbursed. This is why taking policy limits cases seriously is so important, as they can meaningfully help you recover.

Cases involving Policy Limits and Disputes with Insurance Companies

$350,000 Car Accident Settlement; 2011:

The plaintiff, an older woman in her early nineties, was being driven in a passenger vehicle by one of her friends. They were driving on the south side of Chicago. Another motorist collided with them while they were turning left onto Kostner Avenue.

The older woman suffered a broken wrist and a puncture wound in one of her legs. Subsequently, the puncture became infected and required substantial medical care at home. That medical treatment cost her over $100,000.

She brought a claim against both drives and her insurance carrier for uninsured motorist coverage to make up for this. The three parties gave her a combined amount of $350,000 after she got a policy limit action.

$950,000 Motor Vehicle Accident Settlement; 2018:

This multi-car collision began when an automobile pulled out of a driveway and hit a car on Western Avenue in Chicago, Illinois. That vehicle then slammed into the plaintiff’s car at high speeds.

The injured woman, just forty-one years old, herniated a disc. Doctors diagnosed the herniation and performed a spinal fusion surgery (over $120,000 in medical expenses). Still, she experienced pain, suffering, and a lessened range of motion.

She sued the driver that caused the chain reaction collision. The woman and that person’s insurance carrier settled for the policy limit of $950,000 for her damages, including tangible harms and losses.

$1,550,000 Truck Accident Award; 2014:

This fatal automobile accident involved a college student and a large truck, a tractor-trailer. The young girl in her twenties stopped in her passenger car when the semi-truck boarded her. She was killed almost instantly.

The young woman was survived by her parents and siblings. They brought claims against the truck driver, the company, and the decedent’s insurance carrier.

The three parties collectively gave the family $1.55 million in financial compensation, some of which was for a premises liability policy.

$143,000 Uninsured Motorist Lawsuit; 2015:

A Missouri jury awarded a plaintiff more than $140,000 after she was struck by an uninsured motorist in an accident that led to her herniated disc.

The victim was awarded $100,000 to cover her compensation claim, another $33,000 to cover lawyer’s fees, and an additional $10,000 in compensation because the insurance company had denied her compensation, resulting in her lawsuit.

Talk to Our Insurance Coverage Dispute Lawyers Today

The insurance coverage and personal injury accident attorneys at Rosenfeld Injury Lawyers, LLC accept every personal injury case, wrongful death lawsuit, and uninsured motorist compensation claim through contingency fee agreements.

This arrangement postpones payment of all your legal services until we successfully resolve your case through a negotiated settlement or a jury trial award.

In addition, we offer a “No Win/No-Fee” Guarantee, which means if we cannot secure financial compensation on your behalf, you owe us nothing for our legal services.

Contact us today! Our law firm has successfully prosecuted policy limits cases. We provide extensive case evaluations at no charge to get your case started.

We are here to discuss the merits of your case for compensation without obligation. Call our personal injury law offices today at (888) 424-5757 to discuss your accident settlement claim. All information you share with our law offices remains confidential.

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