While the purchase of automobile insurance does guarantee to the policy holder a certain amount of financial protection, in the event of a car accident, there are limits to that protection. The existence of those limits has an effect on car accident claims.
How liability coverage gets limited?
A consumer buys such coverage as a protection against any claims that might arise, following the occurrence of a collision that was caused by the insured and covered driver. Injury Lawyer in Mississauga knows that each insurance company has the right to place a limit on the extent of liability coverage; that limit gets stated in the purchased policy. The insurance company can enforce that limit, regardless of the worth of the policy holder’s claim.
How uninsured/underinsured driver coverage gets limited?
In the case of both uninsured and underinsured driver coverage, the size of the payment provided to the insured driver cannot exceed the amount of money that gets delivered to a holder of primary coverage. That limit will vary from consumer to consumer because not all consumers purchase automobile insurance from the same company. Moreover, not every insurance company offers the same amount of money as its standard primary coverage.
In other words, each coverage gets linked to a set limit. The insurance company agrees to pay for damages caused by the uninsured/underinsured driver, if the extent of those damages does not exceed the limit, as stated in the purchased policy.
There is an additional limit that gets linked to the underinsured driver coverage. That added limit reflects the fact that the underinsured driver does have access to a small pool of funds, which can help with paying for any repairs. No insurance company wants to pay money for repairs that could get covered by a different insurer.
For that reason, someone that has purchased underinsured driver coverage and has then been hit by an underinsured driver has the ability to claim only a limited amount of money. The size of the payment offered to the holder of that coverage cannot exceed the level of coverage that has been purchased by the underinsured driver.
The term underinsured indicates the small size of the payment provided to the person that has tried to save by obtaining a bare minimum of insurance coverage. That very term underlines the limited size of any payment made, once the underinsured driver becomes involved in an accident.
Obviously, if the payment to the negligent driver is small, and if the payment to the person that bought added coverage cannot be greater than that same small payment, the covered driver does not get much money. That fact helps to sum-up the nature of the policy limits that have an effect on car accident claims.