Policy Limits in California

Dealing with a personal injury after an accident brings many questions—especially about how much you can actually recover. One of the most important factors is understanding policy limits and how they apply to your specific situation. These thresholds directly shape the total compensation you may receive. Understanding this can help you make better decisions, avoid mistakes, and plan effectively for your future. Our team of experienced attorneys at The Barnes Firm can break down these complex details, answer your questions, and guide you through each step of the recovery process.

How Insurance Policy Limits Work in California

According to the DMV, auto insurance policies in California must meet specific minimum liability coverage limits. As of January 1, 2025, these limits have been updated to:

• $30,000 for injury or death to one person
• $60,000 for injury or death to more than one person
• $15,000 for damage to property

These figures represent the maximum amounts an insurance provider will pay per accident under a standard policy. It’s important to note that these are just the minimum requirements; policyholders have the option to purchase higher coverage limits for greater protection.

How Policy Limits Affect Settlement Amounts

When pursuing a personal injury claim, the at-fault party’s insurance policy limits can significantly influence the amount you may receive. These limits define the maximum amount the insurer will pay for injuries or property damage caused by their policyholder. If your total losses are less than or equal to that limit, the insurer may cover all of them.

However, when your damages exceed the available policy limits, securing full compensation becomes more complex and may require exploring alternative legal options. The insurance company is only required to pay up to the limit stated in the policy—nothing more.

When Injury Damages Fall Within California Policy Limits

If your total damages are under the other driver’s insurance limit, their insurance may cover the full amount. For example, if you incur $25,000 in medical expenses and the defendant’s policy covers up to $30,000 per person, the insurer should cover your costs—subject to policy terms and conditions.

However, California follows a comparative negligence rule, which can reduce your compensation if you are found partially responsible for the accident. As outlined in §5.03 of California Tort Law:

1. Determine the full amount of damages you would receive if you were not at fault.
2. Determine the percentage of negligence assigned to you.
3. Reduce your total damages by that percentage.

For example, if your total damages are $30,000 but you’re found 25% at fault, your final compensation would be reduced to $22,500.

Scenarios Where Damages Exceed Policy Limits

When your damages surpass the at-fault party’s policy limits, recovering the full amount becomes more complex. For example, if your medical bills and other losses total $100,000 but the at-fault party’s insurance policy limit is only $30,000, that leaves a $70,000 gap—money you may still need for recovery.

In such cases, additional strategies must be considered to pursue full compensation. This may involve checking whether the at-fault party has additional coverage, such as an umbrella policy, or whether your own underinsured motorist protection can help.

It may also be possible to file a personal lawsuit or explore bad faith claims if the insurer handled your case unfairly. These legal and insurance options matter when standard policies don’t fully cover your losses. Reviewing all available resources can make a meaningful difference in your recovery.

Strategies for Recovering More Than the Policy Covers in California

When damages exceed the at-fault party’s insurance coverage, several approaches can help you recover the remaining amount:

Pursuing Additional Insurance Coverage

Identifying other applicable insurance policies can provide additional sources of compensation. These may include:

• Underinsured Motorist Coverage: If you have this coverage on your own policy, it can help compensate for the gap between the at-fault party’s limits and your actual damages.
• Umbrella Policies: Some individuals carry umbrella insurance that offers extra liability coverage beyond standard policy limits.

Legal Actions Against the At-Fault Party

Filing a personal lawsuit against the at-fault individual is another option. If they possess significant personal assets, a court judgment may be pursued to cover excess damages. However, this approach depends on the defendant’s financial ability to pay. While a judgment may be granted in your favor, collecting the full amount can be difficult if the defendant lacks available funds or valuable property. Still, it remains a viable legal route when insurance coverage falls short.

The Role of an Experienced Personal Injury Attorney

Navigating the intricacies of policy limits and pursuing additional compensation requires a deep understanding of California’s legal system. An experienced personal injury attorney can:

• Evaluate all potential sources of compensation
• Negotiate effectively with insurance companies
• Advocate on your behalf in court, if necessary

Having experienced legal support can help protect your rights and make sure all options are considered.

Contact The Barnes Firm for a Free Consultation

Fully understanding policy limits is essential in any personal injury case—especially when your losses exceed standard insurance coverage. At The Barnes Firm, our California personal injury attorneys are here to guide you, explore every legal option, and help you pursue the maximum compensation available under California law. We’re ready to listen, answer your questions, and explain what steps come next.

Call us today at (800) 800-0000 for a free consultation.

Richard Barnes – President of The Barnes Firm

Richard Barnes: “As President of The Barnes Firm, I have dedicated my career to achieving justice in hundreds of cases for the victims of injuries caused through the fault of others. Additionally, I have been honored to have been elected Best Lawyer and a Super Lawyer”

Years of Experience: 30+ years
LinkedIn Profile: Richard Barnes