What does it mean if an automobile insurance policy when it says that policy limits are $10,000/$20,000?

Some types of automobile insurance coverages — for example, bodily injury liability or property damage coverages — will often list policy limits in this manner.  Generally, when policy limits are stated this way, the insurance company is separating the “per person” limits from the “per accident” limits.

Using a $10,000/$20,000 bodily injury liability policy limit (also called a “10/20” policy) as an example, this means that the insurance company will pay no more than $10,000.00 to any one person injured by negligence in the accident, and will pay no more than a total of $20,000.00 to all claimants injured by negligence in the accident.

This can lead to some confusing and conflicting results — especially when one person’s negligence injures multiple people at the same time.  For example, if three people are very seriously injured in an accident by one driver’s negligence and the negligent driver carried only a 10/20 liability policy, those three injured individuals will be fighting over a total $20,000.00 pot, and none of the three would be paid more than $10,000.00.

Obviously, each person would prefer to receive the full value of their claim, however, in the example, it is possible that one person would be left without any compensation if the first two injured people received $10,000.00 checks.  More commonly, an insurance company faced with such a dilemma would attempt to have each injured party agree to a division of the $20,000.00, with each agreeing to some amount less than $10,000.00.

As you can anticipate, this situation often creates conflict, and therefore an experienced Orlando accident attorney may prove useful.

If you have any questions about your Florida personal injury case or Florida car accident please call Kim Cullen and Robert Hemphill, at 407-565-7386 or text us at 407-644-4444. Consultations are always free, 100% confidential, and without obligation.​

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