How Insurance Policy Limits Affect Your Settlement in South Carolina

When you file a claim with the insurance of the driver who caused the accident, it will pay no more than the coverage they carry, even if your medical bills, lost pay, and pain are worth more. Hearing “that’s all the policy has” can feel like a door closing on your recovery. However, if their policy doesn’t cover everything your case is worth, your own underinsured motorist coverage or another policy may help pay the rest. If you’ve been told the other driver’s insurance won’t cover your injuries, the team at Armada Law Injury Attorneys is here to help.

What Does an Insurance Policy Limit Actually Cap?

A policy limit is the most one insurance policy will pay for a covered claim, no matter what your injuries are worth. South Carolina’s minimum liability coverage is $25,000 for one injured person and $50,000 for everyone hurt in one crash, plus $25,000 for property damage. That doesn’t mean the other driver’s policy stops there, since drivers can buy higher limits.

Your medical bills, lost pay, and pain and suffering all come out of the same per-person bodily injury amount. On the other hand, repairs to your car come out of the separate property damage limit.

Why Policy Minimums Run Out Fast After a Serious Injury

We know how fast the bills pile up after a serious injury. Medical care alone can cost far more than the minimum. NHTSA’s national crash-cost study puts the average medical cost of a serious injury at $69,345 per person, based on 2019 dollars. That’s nearly three times South Carolina’s $25,000 per-person minimum, before lost pay or pain and suffering is counted.

What Happens When More Than One Person Is Hurt in an Accident?

The per-crash limit is shared by everyone hurt in the accident. On a minimum policy, $50,000 is the total for everyone injured. No one person can receive more than $25,000 of it.

For example, if a driver with minimum coverage injures three people, they all draw from one $50,000 pot, with a $25,000 limit per person. In a multi-car crash or a crash with passengers, the money available to each person can be far less than the limit printed on the policy.

How Do You Find Out the Other Driver’s Policy Limits?

South Carolina law requires the other driver’s insurance company to disclose the limits within 30 days of receiving a proper written request from your attorney. The answer comes as a sworn statement naming the insurance company, each insured person, and the limits on each known personal auto policy. It can also be a copy of the declarations page.

Your attorney’s request has to include a sworn description of the claim, a statement that the attorney is authorized to make the request, and a copy of the crash report. It also must be delivered by certified mail or statutory overnight delivery.

If you don’t have a lawyer, you can still ask the adjuster. However, without an attorney, the law doesn’t require the insurance company to answer you.

What the Disclosure Law Doesn’t Show You

The disclosure law doesn’t require the insurance company to reveal fleet policies, umbrella policies, or excess coverage, so the first number you learn may not be all the coverage that exists. That gap is a good reason to have the responsible driver confirm in writing that no other policy applies before a claim settles for the limits.

If the driver was working or driving a company vehicle, a commercial insurance policy may also apply.

What Is a Policy Limits Demand?

A policy limits demand is a letter asking the insurance company for a fair settlement equal to the full policy limit, backed by the medical records and bills that show your injuries are worth more.

In South Carolina, that letter carries weight because of a long-standing rule known as the “Tyger River doctrine.” Under the doctrine, an insurance company shouldn’t unreasonably refuse to settle within the policy limit. If it does, and a court later says its driver owes you more than the policy limit, the insurance company can be held responsible for the difference. That duty runs from the insurance company to its own driver, not to you. The demand works because unreasonably refusing a reasonable offer puts the insurance company and its driver at risk.

A policy limits demand isn’t a guarantee, and the rule only applies when the refusal is unreasonable. The insurance company can still dispute who caused the crash or how serious your injuries are.

Can Your Own Underinsured Motorist Coverage Pay the Rest?

Your insurance company is required to offer you underinsured motorist (UIM) coverage, but adding coverage to your policy is optional in South Carolina.UIM helps pay for costs not covered by the responsible driver’s policy limits, up to the UIM limit you carry.

The law requires your insurance company to automatically add UIM that matches your liability limits if you never returned the signed offer form within 30 days. If you recall signing the form and turning it down, you more than likely don’t have it.

If you own more than one car, UIM generally follows the vehicle involved in the crash. Our underinsured motorist lawyers can help you sort out what to do when the other driver’s insurance isn’t enough.

What to Know Before You Accept the Other Driver’s Policy Limits

When the other driver’s insurance company offers its full limit, it usually wants signed paperwork in return. South Carolina’s Supreme Court has said you have to keep your right to sue the driver who caused the accident until your UIM insurance company has agreed to how much it will pay.

If you give up that right first, you may lose your UIM claim. The UIM law also lets your UIM insurance company step in and take over defending the case against that driver once the other insurance company pays its limit.

Your UIM policy can’t make you get your insurance company’s permission before you settle with the other driver. That doesn’t mean everything the other driver’s insurance company sends you is safe to sign. We know a check for the full limit can be hard to turn down while you’re still recovering, so it’s worth having one of our South Carolina car accident lawyers read the settlement papers before you sign.

Can You Go After the Other Driver Personally?

If a settlement or court judgment is more than the driver’s policy limits, the driver owes the difference. However, winning a court judgment and collecting the money are two different things.

For a driver who lives in South Carolina, state law protects part of the value of their home, one vehicle up to a set value, and their retirement accounts from collection. That means a driver with minimum coverage may not have much you can collect.

If the driver files for bankruptcy, federal law won’t let them erase a debt for injuries or death caused while they were driving under the influence of alcohol or drugs. If you were hurt by a drunk driver, that judgment may stay with them even through bankruptcy.

Talk With Armada Law Injury Attorneys About the Coverage Behind Your Claim

The other driver’s policy limit is just the number of one insurance policy, not the value of what happened to you. Let our team at Armada Law Injury Attorneys help you find every policy that may apply and look over any settlement papers with you before you sign. Your focus should be on getting better, not going back and forth with the insurance company. Call 833-332-3128 or reach us through our contact page whenever you’re ready.