Consider this: You are involved in an auto accident, which is deemed your fault.
Your auto policy has Bodily Injury Liability limits of $100,000 each person and $300,000 each accident.
The claimant suffered major injuries and had to be life-flighted and then sent to nursing home for recovery. The claimant’s total medical bills exceeded $250,000.
Your insurance company will pay the Bodily Injury limit of $100,000 per person.
That is all they are responsible for.
The claimant brings a lawsuit against you for the remaining $150,000 for medical bills as well as pain and suffering.
In civil court, the law does not limit how much someone can sue you for. The judgement is in favor of the plaintiff, for $1,000,000.
If you have a personal umbrella policy, this type of situation would not seem so dire. With your auto limits exhausted, your personal umbrella policy would kick in and pay up to its limit, but not over.
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