In serious injury cases, one strategic move can dramatically change the trajectory of a claim:
A policy limits demand.
But it's not something you send lightly. And timing matters.
What Is a Policy Limits Demand?
Every driver has insurance coverage limits — for example:
$15,000
per person (CA minimum)
$100K / $300K
standard policies
$1 Million
commercial policies
In other words:
"Your insured caused significant harm. The damages exceed the available coverage. Pay the full policy limits now."
When Is It Appropriate?
A policy limits demand is typically appropriate when:
Liability is clear
Injuries are serious
Medical bills exceed policy limits
There is permanent impairment
There is significant wage loss
The insured faces exposure beyond coverage
It is most powerful when supported by:
- Complete medical documentation
- Clear evidence of fault
- Expert reports (if necessary)
- A defined deadline for response
Why the Deadline Matters
A properly structured policy limits demand often includes a firm deadline.
This creates pressure on the insurance carrier.
If they fail to accept a reasonable policy limits demand when liability is clear and damages exceed coverage, they may expose their insured — and themselves — to potential bad faith liability.
Insurance companies take that risk seriously.
What Happens If They Accept?
If the carrier tenders policy limits:
The case typically resolves at that amount.
The injured party signs a release.
Payment is issued up to coverage limits.
If the damages exceed coverage, additional strategies may be explored (such as pursuing umbrella policies or other defendants).
What Happens If They Reject?
If the insurer rejects or ignores a reasonable policy limits demand and the case later results in a judgment exceeding coverage, the insurer may face allegations of bad faith failure to settle.
That can significantly increase exposure.
Strategic Considerations
A policy limits demand is not just a number. It's a tactical move.
Send it too early, and you weaken leverage.
Send it without documentation, and it lacks credibility.
Fail to send it when appropriate, and you may lose strategic advantage.
The Bottom Line
Policy limits demands are powerful tools in serious personal injury cases.
Used correctly, they can:
Used improperly, they lose impact.
In high-value injury cases, strategy matters just as much as substance.
Jason Beahm
Jason Beahm is a personal injury attorney representing accident victims throughout the San Francisco Bay Area. His practice focuses on serious injury cases involving car accidents, motorcycle crashes, pedestrian collisions, and wrongful death claims. With extensive experience in complex settlement negotiations and trial litigation, Jason helps clients secure full compensation for catastrophic injuries.