Something does not sound right. Normally, the insurance company does not offer to pay policy limits unless the plaintiff is giving its insured (you) a full release of claims. Why pay money if it does not settle the case and the insurance carrier still has to pay for your defense? You need to consult with a local attorney about your personal exposure and the threat to assets.
I suggest that you pay for a consultation with a local civil defense attorney who usually handles automobile defense work. Bring your automobile liability insurance policy to the conference and all other correspondence you have received from your insurance company and ask for the attorney's advice on how to proceed. Your policy may contain language that allows them to tender the policy limit and forgo further defense for you. You need to find out where you stand.
Mr. Lundeen is licensed to practice law in Florida and Vermont. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that, if known, could significantly change the reply and make it unsuitable. Mr. Lundeen strongly advises the questioner to confer with an attorney in your state in order to insure proper advice is received.
Your insurance company has a duty to defend and indemnify. What usually happens in an excess policy limits situation is that the insurance company will write you a letter explaining that Plaintiff's counsel has demanded "x" and that is in excess of the policy limits. Accordingly, they will advise you to seek your own counsel to advise you as to your exposure for damages beyond the policy limit.
Few Plaintiff's lawyers will actually go through the necessary steps to obtain a judgment in excess of the policy limits unless they have found you have substantial assets from which they can collect.
Demand in writing that your insurance company both defend and indemnify per the express insurance contract, and then be sure to cooperate with your insurance company so they don't have any excuse to hang you out to dry.
Regarding your potential exposure in excess of the policy limit, I'd contact private counsel and ask them about an affidavit of assets, which you could then submit to Plaintiff's counsel through your insurance company lawyer to try and dissuade them from pursuing judgment against you.
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