For example, if you have $1 million in damages and the at-fault driver has $100,000 in coverage, your attorney may send a policy limits demand seeking the full $100,000. Insurance companies often pay limits quickly when liability is clear and damages far exceed coverage.
What Is a Policy Limits Demand?
A policy limits demand is a formal request to the insurance company to pay the full amount of the at-fault driver's liability coverage. This strategy is used when your damages clearly exceed the available insurance limits.
When to Make a Policy Limits Demand
Policy limits demands are appropriate when several conditions are met: the other driver was clearly at fault, your damages significantly exceed their coverage, and you can document your injuries thoroughly.
The demand letter establishes a deadline for the insurance company to respond. If they fail to pay limits quickly in a clear case, they may expose their insured to excess liability – which can create additional leverage.
- ✓Clear liability against the insured driver
- ✓Documented damages exceeding policy limits
- ✓Significant injury evidence (medical records)
- ✓Potential for excess verdict at trial
Frequently Asked Questions
What if my damages exceed the at-fault driver's limits?▼
You can pursue your own underinsured motorist (UIM) coverage, the driver's personal assets (if they have any), and other liable parties like bars that served a drunk driver or vehicle manufacturers.
How do I find out the other driver's policy limits?▼
In California, you can request limits disclosure once you file a lawsuit. Before litigation, your attorney may be able to determine limits through the claims process or early investigation.
What happens after a policy limits demand?▼
The insurance company will investigate and respond. If they accept, you settle for the limits. If they reject or delay unreasonably, you may proceed with litigation and potentially recover more than the limits.
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