What Does Full Policy Limit Really Mean?
A driver is insured for a specified policy limit when he or she causes an accident in a car he or she owns.A driver who is insured for a policy limit of 100/300/100, for example, has coverage for up to $100,000 per individual who is injured in an accident and up to $300,000 for the total paid out as the result of a single collision, as well as $100,000 in property damage.
A car's owner is insured for a specified policy limit, but what happens when someone who is not the owner of the car is driving?In cases in which a driver is operating someone else's insured vehicle, the insurance company that covers the owner of the vehicle may pay the claims and then pursue repayment from the driver's own insurance company. However, it is unlikely that filing two lawsuits, one against the driver and one against the owner, will result in any more compensation than filing a lawsuit against one of the individuals. Once the policy limits have been reached, it is unlikely that any more money will be forthcoming.
What about if the driver is uninsured, but there is coverage on the car?If a driver who has no car insurance himself is driving someone else's vehicle, the owner's coverage will often pay the damages, even if the driver is committing a crime, such as driving on a suspended license. However, this coverage is usually contingent upon the car's owner being willing to press charges against the driver. If the car's owner is unwilling to do so, the victim's insurance company may have to pay compensation and go after the car's owner individually for reimbursement.