How Does The Level of The Opposing Party’s Insurance Coverage Affect Your Case?

Every insurance policy comes with terms. The terms state clearly the maximum amount of money that could get paid to any claimant. That maximum amount is referred to as the policy’s limit.

The policy limits determine the amount of money that could go into a compensation package.

Therefore, a claimant with a serious injury might get offered only a small compensation package. Still, no claimant has a duty to accept the compensation offered by the defendant. Yet any claimant’s right to be compensated in a fair manner would continue to exist.

How does the legal system ensure fairness, if claimants have the right to refuse an offered compensation? The legal system gives all claimants the opportunity to explore an option. What is that option?

Option available to claimant, if limits on defendant’s policy led to refusal of offered package, following pre-settlement negotiations.

The claimant’s option entails exercising a specific right, namely the right to sue the defendant. That means taking the case to court. By carrying out that action, the claimant-turned-plaintiff can demand payment of a fair amount of money.

That option proves useful, if the defendant’s bank account contains lots of cash, or if the account’s funds can be supplemented by the defendant’s assets. Otherwise, the demanded sum of money will not get delivered to the hopeful plaintiff.

An alternative approach

Today smart car owners consider paying for an underinsured motorist option, when buying a car insurance policy. Policyholders that have paid for such an option can ask their insurance company to make up the difference between what the responsible party has offered and what the policyholder deserves.

Yet the underinsured motorist option also comes with a limit. The insurance policy states the maximum amount of money that the insurance company will agree to pay the victim of an underinsured driver. In other words, the Personal Injury Lawyer in Halifax knows that the more money that a policyholder has paid an insurance company, the greater the same policyholder’s chance for adequate coverage, following any accident, large or small.

Some car owners also pay for a second option, one that covers their chance of getting hit by an uninsured driver. Insurance companies introduced the sale of such options, in order to limit the number of times that a policyholder might elect to sue his or her insurance company.

Why might a policyholder sue his or her own insurance company? It could be that the policyholder was hit by an uninsured driver, and had paid for coverage from his or her own insurance company. Still, if another auto was involved, then the insurer might claim that the policyholder could have prevented the damage to that other automobile.

Using that allegation, the policyholder’s insurer might insist on reducing the size of the payment for the collision-related damages. That was a recurring situation in the era before introduction of either the uninsured motorist option or the underinsured motorist option.

Today, some states mandate coverage by insurance companies of any damages that might have been caused by an uninsured driver. In others, drivers have the chance to purchase the option that serves as protection against such a possibility. Both approaches have reduced greatly the number of times that any one policyholder has chosen to sue a specific car insurance company.

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