Being injured in an accident is stressful enough. Understanding the insurance policy limits of the at-fault driver is critical to protecting your financial recovery. At the Law Offices of Garret A. Lungin, based in Sherman Oaks, we guide injured clients through California’s complex insurance landscape, helping them make informed decisions that maximize compensation.
What Are Policy Limits?
A policy limit is the maximum amount an insurance company will pay under a particular insurance policy.
In a bodily injury claim, the at-fault party’s liability insurance sets a cap on what their insurer is required to pay for injuries they cause. Once that limit is reached, the insurance company has no further obligation, even if the injuries are severe.
In California, the most common policies involved are:
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Auto liability insurance
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Commercial policies
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Homeowner or renter policies
In personal injury cases resulting from auto accident, this applies to liability coverage carried by the at-fault driver.
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Bodily Injury (BI) Policy Limits: Covers medical expenses, lost wages, pain and suffering, and other damages. California policies typically list BI limits per person and per accident (e.g., $50,000 per person / $100,000 per accident).
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Property Damage (PD) Policy Limits: Covers damage to vehicles or property.
Why it matters?
If the at-fault driver’s insurance is lower than your total damages, you may need to explore additional recovery options, including suing the driver personally or filing a claim under your own uninsured/underinsured motorist coverage.
Attorney Insight
Many clients don’t realize that the at-fault driver’s policy limit may not fully cover your injuries. In Sherman Oaks, it’s common to see policies that are far below actual medical costs. Knowing the limits early allows us to strategize quickly and prevent lost recovery opportunities. By Garret A. Lungin
California Policy Limit Rules
California law does not require drivers to carry large liability policies. As of January 1, 2026, the minimum auto liability coverage is $30,000 per person/$60,000 per accident for bodily injury, and $15,000 for property damage. This means that one injured person may be limited to $30,000 total settlement and multiple injured people must split $60,000 total settlement.
In serious accidents:
Even moderate injuries can exceed minimum limits in medical costs.
Insurance companies may attempt early lowball settlements to avoid paying higher amounts.
Understanding the policy limits helps your attorney negotiate effectively and prepare for litigation if necessary.
Common Challenges
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Hidden Assets or Low Coverage: Sometimes the at-fault driver carries minimal insurance or none at all.
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Multiple Injured Parties: If several people are injured in the same accident, policy limits may need to be divided, reducing your recovery.
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Settlements Below Fair Value: Insurance companies may pressure you to accept a settlement that doesn’t account for long-term medical care.
Attorney Insight
Our role is to evaluate the insurance limits in context with your total damages, including future medical costs. In some cases, we identify other sources of recovery, like umbrella policies or third-party liability, that clients may not know exist.” By Garret A. Lungin
How Policy Limits Affect Your Case
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Negotiation Strategy: Knowing the policy limit allows your attorney to structure demands realistically, ensuring you aren’t leaving money on the table.
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Litigation Planning: If damages exceed the available coverage, litigation may involve pursuing the driver personally or other insurance layers.
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Settlement Timing: Claims can be delayed if the insurer disputes liability or coverage limits. Being informed prevents rushed decisions.
Protecting Your Recovery in Sherman Oaks
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At our Sherman Oaks office, we help clients:
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Identify the at-fault driver’s coverage quickly.
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Evaluate your damages in full, including medical bills, lost income, and non-economic damages like pain and suffering.
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Explore additional recovery options when insurance is insufficient.
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Negotiate effectively with insurers to maximize settlements within legal and ethical bounds.
Attorney Insight
The sooner we review policy limits after an accident, the better we can protect you. Waiting can result in missed deadlines, delayed medical care documentation, or insurer tactics that limit recovery. In Sherman Oaks, local experience matters because every insurer works differently.” By Garret A. Lungin
Additional Considerations
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Uninsured/Underinsured Motorist Coverage (UM/UIM): If the at-fault driver’s policy is too low, your own insurance may cover the gap.
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Joint Liability: In multi-party accidents, policy limits are divided among all injured parties.
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Medical Liens: Hospitals and providers may place liens on settlements, affecting net recovery.
Why Work With an Experienced Personal Injury Professional?
Policy limits are just one piece of the puzzle. A skilled attorney ensures that you are not left holding the shortfall. At YDB Injury Law, we combine deep California legal knowledge, local Sherman Oaks experience, and personalized client care to protect your rights at every stage.
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Free consultation to review your case and policy limits
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No upfront fees—pay only if we recover for you
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Proven negotiation strategies with insurance companies
Understanding policy limits early can prevent costly mistakes. Contact our Sherman Oaks office today for a confidential consultation. We will explain your options, assess your damages, and map out a strategy to maximize your recovery.
