Why policy limits are the most important number in your case. How bodily injury limits, per-person and per-accident caps, umbrella coverage, and UM/UIM stacking decide what your settlement is actually worth.
This site is operated by Mustafa Bilgic, an individual based in Adiyaman, Turkiye. The operator is NOT a licensed attorney and does NOT provide legal advice. This site provides informational explainers based on Insurance Information Institute publications, IIHS state-law summaries, NAIC model acts, and state insurance department bulletins.
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You can have the worst injuries in the courthouse and the best lawyer in the state, and still recover only what the insurance policy allows. Personal injury cases are almost always paid by an insurance carrier, not by the at-fault driver's personal bank account. If the at-fault driver carries the state-minimum 25/50 policy, and there is no umbrella, no employer coverage, no commercial fleet policy, and no underinsured motorist coverage on your side, then $25,000 per injured person is the practical ceiling no matter what the case is worth in theory.
This is the single most underexplained part of a settlement decision. The personal injury settlement calculator might say your case is worth $185,000. The 17c worksheet might say $7,000. The pain-and-suffering multiplier might land on $90,000. None of it matters if the carrier has $25,000 to spend. Before you spend a year fighting for a number on a worksheet, find out what is actually available to pay. That single step changes how settlement should be approached, whether suit is worth filing, and whether your own coverage needs to be invoked.
Auto liability is almost always stated as two or three numbers. The Insurance Information Institute's consumer guide to auto coverage explains the structure. The standard split-limit format is:
BI per person / BI per accident / Property damage per accident.
Examples: 25/50/25 (state minimum in many states), 100/300/100 (popular middle tier), 250/500/250 (high-net-worth typical), 500/500/500 (single-limit equivalent).
BI per person is the maximum the carrier will pay to any single injured person. If you are the only injured claimant and the policy is 100/300, the cap on your recovery from this policy is $100,000, regardless of how much damage there was to other vehicles or how badly other people were also hurt.
BI per accident is the maximum the carrier will pay for all injuries arising out of the same accident combined. On a 100/300 policy, if three injured people each have legitimate claims worth $150,000, they cannot each receive $100,000. They share the $300,000 aggregate cap. Apportionment becomes part of the negotiation.
PD per accident is the maximum for property damage (vehicles, fences, infrastructure) regardless of how many vehicles were damaged.
A handful of policies write a single limit, often called a combined single limit (CSL). A CSL of 500 means the carrier will pay up to $500,000 total for all bodily injury and property damage arising out of the accident, allocated however serves the claims. CSL policies are common on commercial vehicles.
State minimum auto liability limits as of 2026 vary by state. The IIHS publishes a state-law summary that includes financial responsibility minimums. A representative sample:
| State | BI per person | BI per accident | Property damage |
|---|---|---|---|
| California | $30,000 | $60,000 | $15,000 |
| Texas | $30,000 | $60,000 | $25,000 |
| Florida | PIP-based; BI not always required | $20,000 (when triggered) | $10,000 |
| New York | $25,000 | $50,000 | $10,000 |
| Pennsylvania | $15,000 | $30,000 | $5,000 |
| Georgia | $25,000 | $50,000 | $25,000 |
| Illinois | $25,000 | $50,000 | $20,000 |
| Michigan | $50,000 | $100,000 | $10,000 (in-state) |
| New Jersey | $15,000 (basic) - $25,000 (standard) | $30,000 - $50,000 | $5,000 |
| Ohio | $25,000 | $50,000 | $25,000 |
State minimums change. Always verify against the current IIHS table and the state insurance department bulletin before relying on a figure.
Suppose a worksheet values a personal injury claim as follows:
Now apply policy limits in three scenarios:
Available BI per person: $25,000. The claim worksheet is $250,500 but the practical cap from this carrier is $25,000. Without other coverage, the recovery from the at-fault carrier is $25,000, less attorney fees and liens. The claim is "open and over" the limits.
Primary BI per person: $100,000. Umbrella adds $1M. Available coverage tops out at $1.1M for this claimant alone. The $250,500 worksheet is fully reachable. Negotiation focuses on damages, not on access.
At-fault carrier pays $25,000. Your own UIM coverage (after notice and consent rules in many states) adds up to $75,000 ($100,000 cap minus the $25,000 already paid). Total available: $100,000. The $250,500 worksheet is still partially capped, but UIM significantly closed the gap.
This is why finding the limits comes before fighting about damages. If the limits are very low and there are no other layers, the case may need to be approached as a fast policy-limits demand with strong documentation, not a slow trial-prep workup.
Most state insurance regulations require disclosure of bodily injury limits on written demand, especially after suit is filed. Practical steps:
An umbrella policy sits on top of the primary auto or homeowners policy and pays after the underlying limits are exhausted. The Insurance Information Institute's consumer guide to umbrella insurance describes typical amounts and triggers. A typical setup:
Umbrellas often cover gaps in the underlying policy, including personal injury claims arising from the insured's negligence, dog bites, premises liability, libel and slander, and some intentional acts depending on the policy. They usually exclude business activities, motor vehicles used for hire, and intentional criminal conduct.
If the at-fault driver has no coverage (UM) or inadequate coverage (UIM), your own UM or UIM coverage may apply. Stacking rules vary widely:
See the related guide on UM and UIM uninsured and underinsured motorist coverage for detailed stacking rules and notice requirements before settling with the at-fault carrier.
The Federal Motor Carrier Safety Administration insurance requirements page sets minimums for interstate commercial motor carriers:
These minimums are why truck accident claims often carry much more available coverage than passenger car claims, even when the actual damages are similar. See the Truck Accident Settlement Calculator for the broader claim model.
A policy-limits demand is a written settlement offer for the full limits, sent within a specific deadline (often 30 days), with documentation that the claim clearly exceeds the limits. A properly executed policy-limits demand creates bad-faith exposure for the carrier if the carrier unreasonably refuses to pay the limits when liability is clear and damages obviously exceed them. The NAIC Unfair Claims Settlement Practices Model Act is the regulatory framework most states have adopted.
A strong policy-limits demand letter contains:
Policy limits are the maximum amounts the at-fault driver's insurance will pay. They are stated as a per-person and per-accident dollar cap for bodily injury, plus a separate cap for property damage.
Yes, but collecting an excess judgment requires either personal assets of the defendant, an umbrella or excess policy, a co-defendant with its own coverage, or your own UIM. Without one of those, the practical recovery is usually limited to available coverage.
Send a written request to the at-fault carrier citing your state's disclosure rule. After suit is filed, most jurisdictions require the carrier to disclose. Request a sworn limits affidavit before settlement to lock in the disclosure.
You may have a UIM claim against your own carrier after the at-fault limits are paid or tendered. Notice and consent rules vary; do not settle with the at-fault carrier before checking your UIM contract requirements.
Not always. Umbrellas require the underlying policy to be exhausted and require the underlying limits to meet a minimum (often 250/500). Exclusions for business use, intentional acts, and certain vehicles can apply. Read the umbrella declarations and exclusions.
No. This is general educational information. SettlementCalculator is operated by Mustafa Bilgic, a non-attorney individual operator. Consult a licensed attorney in your state before accepting a policy-limits settlement or signing a release.