What are Policy Limits and why is it important to know them?
The “policy limits” on any insurance policy refers to the amount of coverage that was purchased by the insured person. In Virginia, the minimum amount of coverage one is required to have on their policy is $25,000 per person. In North Carolina, the minimum amount is $30,000 per person. If there is a case with very serious injuries, or potential extensive medical treatment, it is important to know as soon as possible what the policy limits are. The reason is because these limits are going to dictate the maximum amount you can recover from the person who injured you. You do not want to go through extensive, expensive treatments, only to find out that there is insufficient money available in the case to pay for your medical bills. Under Virginia law, if your medical bills from the collision exceed $12,500.00, the defendant’s insurance company is obligated to divulge the amount of their policy limits. You may ask whether or not the person who hit you can be sued for additional amounts above and beyond the coverage amount that they purchased. If the policy limits are all that is going to be offered, why are you limited to the policy amounts? The answer is that there is usually a very good reason why someone has minimum coverage, and that is because they cannot afford more. If you were to attempt to seek a judgment against the individual who hit you, for an amount above and beyond any limits that have been offered to you, it is highly unlikely that you will ever see a penny from it. Yes, there are procedures in place to collect on a judgment, but they are long, arduous, and unlikely to yield any results. You and your attorney’s time would be better spent making sure that there is no additional coverage available through the policies of people who may be related to and live with the defendant and/or the owner of the vehicle.