Policy limits are the maximum amount an auto insurance company will pay for a covered claim. In a car accident case, policy limits determine how much compensation is available for medical bills, lost wages, and pain and suffering.
Auto policies are often written in three numbers, such as $100,000 / $300,000 / $50,000:
- $100,000 – Maximum paid for injuries to one person
- $300,000 – Maximum paid for all injured people in one accident
- $50,000 – Maximum paid for property damage
If your damages exceed the at-fault driver’s policy limits, the insurer generally does not have to pay more than that amount. In some cases, additional compensation may be available through your own uninsured/underinsured motorist (UM/UIM) coverage.
Because policy limits directly affect how much you can recover after a crash, reviewing all available insurance coverage is a critical first step in evaluating a car accident claim.
