A policy limit is the maximum, total, over-all amount of insurance
available to pay you from all insurance sources combined. The policy
limit is determined before the accident ever occurs by how much
insurance the other side chose to purchase (and by how much insurance
you, your household relatives, or the owner of the vehicle you were in
chose to purchase). Contrary to what most clients believe, a "policy
limit" has nothing to do with what your case is worth. A
policy limit establishes the total, maximum, over-all amount of
insurance money that you can receive in your case (no matter what your
case is worth), because it is all the insurance money that there is
from all insurance sources combined. Contrary to what most clients
believe, the fact that the other side has "some" insurance does not
mean that the other side has unlimited insurance. This is because
insurance is sold before the accident even happens in arbitrary
amounts, like $10,000.00, $25,000.00, or $50,000.00. The fact that your
injuries are worth $100,000.00 will not convert a $10,000.00 policy
into a $100,000.00 policy. Think of an insurance policy as a bank
account. You can withdraw all of the money out of the account, but you
cannot get more money out of the account than it had in there in the
first place. Once you get it all, nothing is left to get. In order to
get insurance money, you have to sign a contract giving up any
possibility to get more money from the insurance company (which you
could not get anyway) or from the persons on the other side. So, you
cannot receive money from the insurance company in the settlement, and
then "sue" the people on the other side to try to get even more. If
you forfeit the right to get the insurance company's money just to sue
the persons on the other side (personally), the people on the other
side usually declare bankruptcy, and then their debt to you usually
gets "discharged" (excused) and you would get nothing at all. Because
of this, the policy limit effectively operates as an artificial ceiling
that establishes an arbitrary maximum amount you can recover in your
case no matter what your case is really worth. An exception exists if
you offer to settle for policy limits and the other side refuses to pay
it to you despite actual knowledge that your case is really worth more.
For more information about Legal Problems That Are Impossible To Overcome in Orlando contact Hanson &
Hanson, P.A. today at 1-800-426-7662 to schedule your free initial
consultation. More information about Orlando Auto Accidents can be
found in the practice areas section of our website.
