Take it to the Limits…Policy Limits that is!

From the famous song by the Eagles, Take it to the Limit:

Keep on turning out and burning out and turning out the same
 So put me on a highway
 Show me a sign
 Take it to the limit!

If you are ever in a car wreck, motorcycle wreck, run over as a pedestrian, or involved in any other kind of wreck, if your damages are high enough, you may be taking it to the limit, policy limit that is. Below is a good discussion of some auto liability policy limit information of which you might not be aware. Read, learn, apply!

1. Minimum Policy Limits Determined by State Legislature

Each state has a minimum liability policy limit. This limit is determined by the legislature for the state. For Texas, you will find the legislated minimum policy limits at Texas Transportation Code § 601.072, which are $30,000.00/$60,000.00/$25,000.00.

a. Individual – In Texas, the minimum INDIVIDUAL bodily injury liability policy  limit is $30,000.00. This means that, if you are hit by someone with a minimum   limits policy, that policy will not pay more than $30,000.00 for your damages.  $30,000.00 might seem like a lot of money, but when you see $60,000.00 air   ambulance bills and $25,000 emergency room bills, you can see how those limits  could be maxed out very quickly. If you are able to carry underinsured motorist   coverage, it will protect you against situations when the minimum limits are lower  than your damages.

b. Per Occurrence – In Texas, the minimum PER OCCURRENCE bodily injury  liability policy limits is $60,000.00. This means that, if there are a lot of people   hurt in the wreck, the policy will not pay any more than $60,000.00. If there are 2  people injured, and their damages merit it, the policy will not pay more than    $30,000.00 per injured party. This becomes more of an issue when there are more  than 2 injured people. As the number of individuals injured, in one wreck,  increases, the $60,000.00 PER OCCURRENCE limit does not change, meaning   that, typically, the more people that are injured, the less money is available for    each injured person. Again, this is where having underinsured coverage comes in   to play.

c. Property Damage – In Texas, the minimum TOTAL property damage policy limits  are $25,000.00. I have seen, on several occasions, where this limit was nowhere   close to being enough to cover all vehicles damaged, in a wreck, caused by the at  fault driver. It is more often than not, that I see clients go through their underinsured   carrier, for property damage, because $25,000.00 is not enough, when multiple  vehicles are involved.

2. How do I know if the negligent driver has minimum policy limits?

If you are asking yourself, “How do I know if the person that caused my wreck has minimum limits?”, that is a great question! There are two options, through the insurance carrier, to be able to determine if the person that hit you has minimum liability limits.

a. Limits offered – If the adjuster offers you policy limits, or you hire a personal injury  attorney and the adjuster offers the personal injury attorney policy limits, you, or   your personal injury attorney, have the right to request proof of the policy limits.  Typically, in response to this request, the adjuster will provide either a Certificate   of Coverage, confirming the limits, or a declarations page, from the policy, showing  what the limits are.

b. Provided in litigation – If you are not able to get your claim settled, prior to filing  suit, your personal injury attorney, through discovery, will be provided a copy of   the declarations page, showing the limits of the policy.

If you are early in your claim and you want some hints as to whether the driver MIGHT have more than minimum limits, you might look to what kind of “stuff” they have (if possible). Typically, the more “stuff” a person has, the higher their liability limits will be. If someone has a sailboat or yacht or motor home, and they hit you and hurt you really bad, they are going to want to have higher limits, to protect you, and their “stuff”, so that you cannot get a judgment and come take their “stuff”. 

3. State or City Owned Vehicle Limits

If you are involved in a wreck with a state, county, or city owned vehicle, like a police car, sheriff’s car, municipally owned ambulance, etc., you will most likely be looking at not only, a different policy limit, but also a different type of claim.

In the Civil Practices and Remedies Code, at Sec. 101.023, you will find a breakdown of the limits against state government, local government, municipality, and emergency service organization:

(a) State Government

i. Individual – $250,000

ii. Per Occurrence – $500,000

iii. Property Damage – $100,000 

(b) Local (County) Government 

i. Individual – $100,000

ii. Per Occurrence – $300,000

iii. Property Damage – $100,000

(c) Municipality (City)

i. Individual – $250,000

ii. Per Occurrence – $500,000

iii. Property Damage – $100,000 

(d) Emergency Service Organization

i. Individual – $100,000

ii. Per Occurrence – $300,000

 iii.   Property Damage – $100,000.

4. Privately Owned Emergency Vehicle

Depending on where you live, your city could offer public, private, or public and private emergency services. Emergency service vehicles, offered by the government, are covered by the policy limits listed in number three, above. Privately owned emergency vehicles are not covered by the government and are required to carry their own liability coverage. Since these types of ambulances are considered “commercial” vehicles, they typically carry higher limits. According to generalliabilityinsure.com, “The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small ambulance services ranges from $67 to $99 per month based on location, number of vehicles, payroll, revenues, experience and more.”

5. Commercial Policy Limits

Lastly, if you are involved in a wreck with an 18 wheeler, you are typically going to see limits of $1,000,000.00. In the past 20 years, I have seen one $500,000 policy and three $750,000.00 policies, in commercial collisions, otherwise, they have all been $1,000,000. Commercial policies can be drafted very differently than a basic liability policy, like you or I would purchase for our personal vehicle. You could come across a “wasting policy”; these types of policies are actually decreased in value, as the legal costs of defending the lawsuit, if a lawsuit is filed, increase. When you are dealing with a commercial carrier, you also want to be aware of potential umbrella policies. Umbrella policies cover claims in excess of the limits of the auto liability policy. One other side note, regarding another different type of “commercial” policy would be a farm and ranch policy. Seeing as we are in a farm and ranch state, there is a potential that you could be involved in a wreck with a farmer or rancher and need to know that this type of policy could be what covers you, if you are injured in the wreck.

Thanks for taking it to the limits with me today! There are so many intricate details involved, when someone is injured in a car wreck, motorcycle wreck, run over as a pedestrian, or involved in any other kind of wreck, and that is why it is so important to consult a personal injury attorney, to make sure you have all the facts!

Stay safe!