Accidents can strike at any time and cause you injury, expense, and other harm. Many times, these events and the corresponding loss will implicate policy limits (or policy limit) 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?
Well, you need to send a policy demand letter that contains clear language as to the accident, injuries, costs, liability, and applicable policy limit 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 plaintiffs counsel perspective. If you would like legal advice or information on these topics, then contact the Rosenfeld Injury Lawyers LLC law firm.
We can explain the attorney client relationship within the context of policy limits including probably 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 victim’s injuries, third party claims, personal injury cases, bad faith claims, etc.
What are Policy Limits in Insurance Policies?
Policy limits or insurance policy limits are basic provisions of insurance policies set by any insurance company. The policy limit caps how much compensation or benefits an insurance company will pay in the event of a claim payout.
For example, if you get into a car accident and have a $1 million policy limit, then they will only pay that much for you 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 that you entered into prior to 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 but 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 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 will be if it was deemed reasonable at the time.
If not, you may file a bad faith lawsuit with a demand letter in 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 merely 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.
If there was a bad faith failure after your settlement demands were made, then 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
You should discuss the probably liability of a bad faith insurer with a personal injury lawyer prior to sending a policy limits demand letter so that you can ensure your policy limits demand is reasonable.
Talk to our law firm about the insured’s liability (or the insured’s punitive damage exposure) and coverage dispute promptly as well as 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
If the insurer rejects claim, initially or completely, we can work you and third parties to file a policy limits demand arguing they negotiated in bad faith and have probably 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/or bad faith in the negotiation process.
- Write a settlement demand letter and send it to the insurance company.
- Argue on your behalf 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 recovery financial compensation against one or more than one party.
What Can You Get from a Policy Limits Demand to an Insurance Company?
If the insurer violates their duty of good faith to negotiate reasonably and does not give your interests equal weight, then they may be exposed to liability far greater than the initial policy limits demand.
In order to obtain this amount of compensation, you need to proceed against them on the underlying action and then show that they did not operate in good faith with regards to your policy limits action.
Once you are successful at this point, then the insurance company may be forced to give you the entire value of your damages judgment, and not just the amount of your policy limits.
This could mean that all of your medical expenses, lost wages, property damage or destruction, pain and suffering, and other tangible and intangible losses are reimbursed in full. This is why it so important to take policy limits cases seriously as they can meaningfully help you in your recovery.
Cases involving Policy Limits and Disputes with Insurance Companies
$350,000 Car Accident Settlement; 2011:
The plaintiff, an elderly 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 elderly woman suffered a broken wrist and 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.
To make up for this, she brought a claim against both drives and against her own insurance carrier for uninsured motorist coverage. The three parties gave her a combined amount of $350,000 after she brought 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 was stopped in her passenger car when the semi-truck broadsided her. She was killed almost instantly.
The young woman was survived by her parents and siblings. They brought claims against the truck driver, truck company, and the decedent’s own 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 and another $33,000 to cover lawyer’s fees and an additional $10,000 in compensation because the insurance company had denied her payment for compensation, resulting in her filing a 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 after we have successfully resolved 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 are unable to 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. To get your case started we provide extensive case evaluations at no charge.
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 claim. All information you share with our law offices remains confidential.