You already know that your insurance company will pay someone who you injure for the damages they can show are related to the accident you caused … but did you know they are only obligated to pay up to your policy limits in settlement or after a court judgment?. The amount of a judgment could be a very large sum of money, potentially hundreds of thousands of dollars or even more, depending on the extent of the damage and the severity of the injuries that you caused.

Many cases are resolved for less than the limit of the policy; however, if you actually go to trial and the plaintiff obtains a jury verdict over the policy limit, the you will personally be on the hook for the overage. Sound like a good idea to get higher limits? What if the higher limits didn’t really cost that much more? Well, it’s true. You don’t pay double for twice the coverage – not even close.

Because rates are based on the risk of loss, and because big claims are relatively rare, it isn’t very likely the insurer will be paying out all that money. But if you have to pay it, the results on your life would be devastating!! There are rare circumstances, if the plaintiff makes a “policy limit demand” and the insurance company rejects the demand, then after judgment the insurance company could be on the hook to pay all of the judgment, no matter what the amount. Still, why take that chance? Raise your limits today!

Added benefit! When you raise your limits, you are usually raising the protection that you are buying for yourself under “Uninsured Motorist” and “Underinsured Motorist” coverage. Check into this protection today!