Shortly after a car accident where a third party gets injured and seeks compensation for medical expenses from the at-fault driver, there’s often a request for policy limits information. Typically, an attorney or public adjuster contacts the insurance company to urge them to reveal the policy limits.
Individuals well-versed in this procedure make demands for policy limits, which encompass umbrella coverage and excess amounts. When insurance companies choose not to reveal this information or only disclose it partially, they gain a strategic edge by forcing the injured party to negotiate without knowing the full extent of potential compensation available.
In cases involving claims by third parties, one of the most crucial pieces of information is the total available funds to compensate the victim. This “policy limits” data is so pivotal that some liability insurers guard it closely, refraining from disclosing it to prevent its use in negotiations.
Understanding How Insurance Policy Works
Every liability insurance policy comes with a defined limit, representing the maximum sum the insurance company commits to covering for losses resulting from a covered incident.
Consider purchasing car insurance featuring a liability policy capped at $20,000. In an accident where you’re at fault, the insurer will only disburse up to $20,000 to cover injuries or vehicle damages suffered by others.
Should the total damages amount to $50,000, the insurer won’t cover the additional $30,000. In such a scenario, if a judge or jury awards this excess amount, you’ll need to seek the remaining funds from alternative sources.
Knowing the Insurance Policy Limits
The law requires drivers to hold auto insurance meeting specific standards. In California, drivers must maintain a minimum of:
- Bodily injury liability coverage of at least $15,000 per person/$30,000 per accident.
- Property damage liability coverage of at least $5,000.
- Uninsured motorist bodily injury coverage of at least $15,000 per person/$30,000 per accident.
Those responsible for injuries should possess at least this level of coverage. Some drivers might have policies exceeding these amounts, often reflecting the maximum settlement their insurer will offer an injured driver.
Typically, insurance companies handling liability claims have withheld policy limit information pre-litigation, despite eventually being obligated to disclose these amounts upon formal discovery during litigation [Refer to California’s Judicial Council Form Interrogatories, No. 4.1(e)].
In California, when a claimant requests policy limits information pre-litigation, the insurance carrier must promptly inquire in writing to their insured about releasing this information. If the insured consents in writing, the carrier can communicate the policy limits to the claimant. Otherwise, the absence of documented consent could jeopardize the carrier’s position if the case could have settled within the policy limits pre-litigation but results in an excess at trial, potentially leading to liability and exposure beyond the policy limits.
This creates a divergence of interests between insurers and policyholders. Non-disclosure favors the insurer economically, while disclosure could benefit the policyholder by facilitating purposeful settlements, aiding case evaluation, discouraging excessive demands, and potentially preventing litigation.
Do Insurance Companies Lie About Policy Limits?
Many individuals hold the mistaken belief that the primary aim of insurance companies is to assist them. Regrettably, their foremost objective isn’t necessarily centered on aiding you with your losses.
Just like any other business, insurance companies want to earn a profit. . If each client receives a maximum payout for their injury claim, the company’s ROI (Return on Investment) will be deficient. Therefore, insurance adjusters do everything possible to minimize payouts or deny claims—including making false statements.
When speaking to an insurance adjuster, you must understand that they represent the at-fault party. For the sake of your claim, this makes them your opponent. Having an experienced personal injury lawyer handle all communications can help protect your claim.
Should I Disclose My Policy Limits In California?
Navigating policy limit disclosure in California poses a crucial question for those involved in insurance claims. While not legally mandated, revealing policy limits can foster trust and transparency. However, premature disclosure might limit negotiation flexibility. Seeking legal counsel becomes essential, as experienced attorneys can guide individuals on the strategic and ethical implications, ensuring a fair and balanced negotiation process for all parties involved in the claim.
Contact An Insurance Dispute Lawyer With Bojat Law Group Today
Swift action is vital after an injury. Contacting a Thousand Oaks personal injury attorney, like one from Bojat Law Group, early in your case is crucial to avoid preventable mistakes. This ensures preservation of key evidence, approaching witnesses promptly while memories are sharp, and meeting legal deadlines. Insurance companies often contact swiftly, but having an attorney protects you from making damaging statements or accepting undervalued settlements in haste.