Auto insurance limits are the maximum amount of money that an insurance company will pay out in the event of an accident. These limits are set by the policyholder when they purchase their auto insurance policy.
In most states, auto insurance policies are required to have minimum limits for bodily injury liability and property damage liability. Bodily injury liability covers the costs of medical expenses, lost wages, and other damages that may arise from injuries sustained in an accident. Property damage liability covers the costs of repairing or replacing property that is damaged in an accident.
For example, in the state of California, the minimum limits for bodily injury liability are $15,000 per person and $30,000 per accident. The minimum limit for property damage liability is $5,000.
When an auto insurance policy states “$15,000 per person and $30,000 per accident,” it means that the insurance company will pay up to $15,000 for each person who is injured in an accident and up to $30,000 total for all injuries sustained in the accident.
So, if only one person is injured in the accident, the insurance company will pay up to $15,000 to cover their medical expenses, lost wages, and other damages resulting from the accident. However, if more than one person is injured in the accident, the total payout for bodily injury liability will not exceed $30,000.
Let’s say there is a crash with 3 injured claimants. In this scenario, let’s assume that each of the three claimants had medical bills that totaled $20,000, $25,000, and $30,000, respectively, for a total of $75,000. Since the 15/30 policy limits have been reached, the insurance company will only pay out a total of $30,000 for bodily injury per accident, which means that each claimant will receive a portion of the available funds based on their individual circumstances.
Assuming that the insurance company decides to pay out the claims in proportion to the amount of medical bills incurred by each claimant, the first claimant would receive $10,000, the second claimant would receive $12,500 and the third claimant would receive $15,000 (these figures are all half of their total medical bills).
It’s important to note that this is just one possible scenario, and the specific outcome will depend on the individual circumstances of the accident and the insurance policy in question. Additionally, it’s worth noting that if the total amount of damages exceeded the policy limits, the claimants may have under-insured motorist coverage available through their own policies, or have the option to pursue legal action to recover the remaining costs.
Have you or a loved one been involved in a car crash? Our law office is available and ready to help, contact Ray Padilla Law, APC today at (619) 431-1187 (San Diego) to speak with Attorney Ray Padilla directly. Please call even if it’s simply to ask, “what should I do?”