When BI (Bodily Injury) and UM (Uninsured and/or Under-Insured) come into play, they each have limits on how much money is available in the policy usually. Limits are extremely important to pay attention to because they allow you and your attorney to gage how much treatment you’re able to get if you want to ensure that it will all be paid for with a settlement. If you need an important surgery that is relevant to the injuries from your accident, your attorney will make sure the BI and/or UM limits are high enough to cover the cost of it.
The limits vary from policy to policy, and each state has it’s own requirements for the minimum limit an insurance policy can have. Of course, the more you pay for your insurance policy, the higher your limits will be; therefore, the more money you can get from your settlement. If the driver who hits you or the location where you had your slip and fall accident pays a lot for their insurance and their BI limits are fairly high, you’re in luck, those are generally the best cases.
Now, how to read and understand what your limits are? Well, they are portrayed in a pair of two numbers. For example, your insurance company informs you that your policy is a 10/20. Now you’re confused, right? So, it’s supposed to be read in thousands, meaning $10,000/$20,000. The first number is per person, while the second number is per accident. If it were just you in the car, the max amount you can get in compensation is $10,000. In accidents where there are multiple people in the car, the $20,000 would be divided amongst you and your companions in the vehicle. If you were 3 people in the car, you would not be able to get $10,000 each, you’d have to use the second number that’s per accident.
Just because you currently have 10/20, does not mean you cannot get it as high as you’d like (see blog on costs). Limits can be 100/300, which mean $100,000 per person and $300,000 per accident. Coverage can even be higher than 1 million sometimes. It’s important to have decent limits as part of your UM coverage because you never know when the at-fault’s BI will only have the 10/20 limit and your treatment will have to end up costing more than that.
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