Take It to the (Policy) Limit — Check-In on Your Liability Coverage

As the pandemic-related lockdowns have ended and more cars are on the road, we have noticed a disturbing trend—more accidents, more severe injuries, and more significant claims. And as a result, we are more frequently pursuing injury claims on behalf of our clients that are pushing the limits of applicable liability coverage on the at-fault driver’s policy.

Here are some things to consider when purchasing and using liability coverage:

What is “liability coverage”?

“Liability coverage” is the portion of an insurance policy that pays to cover damages and injury you cause another.  When we work with an injury client, we are most often making a claim against the “liability coverage” on the at-fault driver’s insurance policy.  Liability coverage is often expressed in terms such as “per person/per occurrence”.  In other words, if an at-fault driver has a “$30,000 per person/$60,000 per occurrence” policy, that means that the maximum insurance coverage is $30,000 for each injured individual, up to $60,000 total, regardless of the number of injured persons.

What are the mandatory minimums?

It differs by state.  Maryland requires each driver to carry minimum liability insurance of $30,000 per person/$60,000 per occurrence.  As of January 1, 2022, Virginia’s mandatory minimum coverage was raised to $30,000 per person/$60,000 per occurrence (it had been $25,000/$50,000).  Virginia’s mandatory minimum coverage limits are scheduled to increase again, effective January 1, 2025, to $50,000 per person/$100,000 per occurrence.  The District of Columbia’s mandatory minimum liability insurance policy limit is $25,000 per person/$50,000 per occurrence.

What if I cause an injury in excess of my policy minimums?

In short, you could be personally liable for any judgment in excess of your policy premiums.  For example, if you are a Maryland resident with the bare minimum coverage of $30,000 per person/$60,000 per occurrence, and you are at fault in a serious accident causing permanent injury to many victims, you may be liable for well in excess of $60,000.  Your automobile insurance would only cover $60,000.  Unless you have a policy of umbrella insurance, you would be personally liable for damages in excess of your policy minimums.

What should I do?

I strongly encourage you to review your insurance policy each year for ways to protect yourself and others around you.  Maintaining insurance coverage limits beyond the mandatory minimum limits may be more expensive, but it is important.  Not only does it provide insurance coverage for anyone who you may injure in an accident.  Perhaps more importantly, it will give you peace of mind that your personal exposure for damages will be minimized if you cause an auto accident.

If you would like to discuss how to implement these resolutions or a potential injury claim, please contact Bulman Dunie. Dan Shaivitz, lead personal injury attorney, can be reached at (301) 656-1177 or dshaivitz@bulmandunie.com.