What Policy Limits Mean, and Why They Can Cap a Good Case

The ceiling on most cases

Every insurance policy has a maximum it will pay. Those are the policy limits, and in many injury cases they decide what a case is actually worth far more than the injuries do.

Here is why. A jury might decide your injuries are worth a great deal. But if the driver who hit you carries only the minimum insurance and has no real assets, there may be no practical way to collect more than the policy pays. A verdict is only worth what can be collected.

How limits are written

The part of an auto policy that pays people the driver hurts is bodily injury liability coverage. It is written as two numbers, such as 30/60:

• The first number is the most the policy pays for any one person’s injuries, in thousands of dollars
• The second number is the most it pays for everyone hurt in the same crash

California’s minimum is 30/60: $30,000 per person and $60,000 per accident. It went up to that level in January 2025, and it is scheduled to rise again in 2035. Many drivers carry only the minimum. Some carry nothing at all.

For a serious injury, $30,000 does not go far. A single hospital stay can exceed it.

Where else the money can come from

When the at-fault driver’s limits are low, the most valuable work early in a case is finding every other source of coverage. These are the usual places to look:

• Other people who are responsible. If the driver was working when the crash happened, the employer may be responsible too. If the driver was using someone else’s car, the owner’s policy may apply.
• An umbrella policy. Extra coverage sitting on top of an auto or homeowner’s policy, often in the millions. Its existence is not always volunteered.
• Your own underinsured motorist coverage. If you bought uninsured and underinsured motorist coverage, it can pay when the other driver’s insurance is not enough. Read uninsured motorist claims for how that works.
• Your own medical payments coverage. Med-pay is usually modest, but it pays medical bills regardless of fault.

When the injuries are worth more than the policy

When the harm is clearly greater than the coverage, the claim is often presented to the insurer as a demand for the full policy limits, with a deadline to respond. An insurer that unreasonably passes up a fair chance to settle within its limits can expose its own driver, and itself, to much more. That is one reason these demands are written carefully. Read what a demand letter is for more.

Check your own policy today

The single most useful thing you can do, before anyone hits you, is look at your own auto policy. Find your uninsured and underinsured motorist limits. If they are at the minimum, ask your agent what it costs to raise them. On Southern California roads, it is often the coverage that ends up paying.

Talk to Boyd

If you have been told the other driver’s insurance will not cover your injuries, that is not always the end of it. The consultation is free, and Boyd takes the call himself: (714) 656-2400.