If you’ve been injured in a car accident, one of the biggest factors that determines how much compensation you can recover is the at-fault driver’s insurance policy limits. Understanding how these limits work is critical—because what the other driver carries on their policy directly affects what you can collect for your medical bills, lost wages, and pain and suffering.
Here’s what you need to know to protect yourself and your claim.
What Are Car Insurance Policy Limits?
A policy limit is the maximum amount an insurance company will pay on a claim. Every auto insurance policy has separate limits for bodily injury and property damage. For example, Kentucky requires drivers to carry minimum liability coverage of $25,000 per person and $50,000 per accident for bodily injuries, plus $25,000 for property damage.
Here’s the problem: these minimum limits often aren’t enough to cover serious accident injuries. The average hospital stay costs around $4,000 per day. If you spend just one week in the hospital, your medical bills could total $28,000 or more, already exceeding what a driver with minimum coverage can pay. Add in lost wages, ongoing treatment, and pain and suffering, and you can see how quickly damages spiral beyond what the at-fault driver’s insurance will cover.
What Happens When Your Damages Exceed Policy Limits?
When your car accident claim exceeds the at-fault driver’s insurance limits, the insurance company will only pay up to that maximum amount and not a penny more. This leaves you with unpaid medical bills, lost income, and other expenses that you’re suddenly responsible for covering yourself.
But you’re not necessarily out of options. Here’s what you can do:
Use Your Own Underinsured Motorist Coverage (UIM)
If you have underinsured motorist coverage on your own policy, it can help bridge the gap between what the at-fault driver’s insurance pays and your total damages. This is exactly why having UIM coverage is so important—it protects you when someone else’s insurance isn’t enough.
Many people don’t realize they have this coverage or don’t understand how valuable it is until they need it. When you file a UIM claim, you’re essentially asking your own insurance company to step in and cover the difference. Keep in mind that your insurance company will still treat this as an adversarial process, so having an attorney negotiate on your behalf can make a significant difference in what you recover.
Identify Additional Liable Parties
Sometimes there’s more than one party responsible for your accident. If the at-fault driver was working at the time of the crash, their employer might be liable. If a defective vehicle part contributed to the accident, the manufacturer could be on the hook. If poor road conditions played a role, a government entity responsible for road maintenance might share responsibility.
When multiple parties are liable, multiple insurance policies come into play. This can significantly increase the total compensation available to cover your damages. An experienced attorney can investigate all potential sources of compensation and identify liable parties you might not have considered.
Why Policy Limits Matter for Your Case
Understanding policy limits helps you set realistic expectations for your claim and make informed decisions about your case. If the at-fault driver only carries minimum coverage and you have significant injuries, you need to know upfront that their insurance won’t cover everything—and you need a plan for how to recover the rest.
This is also why carrying adequate insurance on your own vehicle is so important. You can’t control what coverage other drivers have, but you can protect yourself by carrying higher UIM limits. It costs relatively little to increase your coverage, and it could save you from financial disaster if you’re ever hit by an underinsured driver.
How Noakes Law Group Can Help
Dealing with insurance policy limits while you’re injured and trying to recover is overwhelming. At Noakes Law Group, we investigate every possible source of compensation—including the at-fault driver’s insurance, your own UIM coverage, and any additional liable parties. We know how to maximize your recovery even when policy limits seem like a dead end.
Don’t let insurance policy limits cost you the compensation you deserve. Contact Noakes Law Group today for a free consultation. We’ll review your case, explain your options, and fight to get you every dollar you’re entitled to. You pay nothing unless we win. Call us now for your free consultation.