When the dispute created by an accident gets settled, the size of the payout to the claimant depends on more than the extent of damages. The terms of the policy that had been purchased by either of the involved parties could affect the size of that payout.
A car owner could purchase liability or no-fault insurance.
There are 2 types of liability insurance. One of them covers bodily injury to someone other than the policyholder. The second type covers property damage to any property that was not owned by the policyholder. Both of them have terms that dictate the nature of the available coverage.
No-fault insurance is available to those car owners that live in a no-fault state. No-fault insurance has been designed to have the policyholder’s insurance company pay the damages for any accident, regardless of who might be named at fault for that same accident.
Someone that had a no-fault policy would not be able to sue the party responsible for a given accident, unless the resulting damages had amounted to a certain figure, or had equaled an amount higher than that same figure.
Car owners also have the chance to purchase options to an automobile policy
One of those options is the uninsured motorist option. It ensures coverage of any accident-linked damages, if the responsible party was not carrying any liability insurance. The money paid to the claimant comes from the company that convinced the policyholder to buy the uninsured motorist option.
The second of the available options is the underinsured motorist option. It is meant to protect a driver that has been hit by a driver with a low-level of insurance. Such a driver would not be able to provide any claimant with a large compensation package, as per personal injury lawyer in Ottawa.
However, companies that sell such an option to their policyholders also place a stipulation on the delivery of any compensation. The amount of purchased coverage must be equal to or greater than the value of any reported injury or loss. That stipulation keeps car owners from using the underinsured motorist option to supplement the limited payments that are associated with a liability policy that has low limits.
Every policy comes with limits
Those limits are stated in the policy’s terms. The limits dictate the maximum size of any payout that could be made in response to any accident. A low limit means a small payout. A larger limit could mean a big payout. Still, the negotiations could be rather long, because the adjuster would have a lot of money to play with.
He or she would try to make the payout lower. For instance, he or she might allege that the claimant was partly responsible for the reported damages.