what is the difference between 250,000/500,000 and 500,000/500,000 liability limits

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Nov 9, 2017

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Insurance Question from Calumet Park, IL

Asked on 11/09/2017

what is the difference between 250,000/500,000 and 500,000/500,000 liability limits there is an accident with 2 people injured 1 has bills of 350,000 and 2 has 250,000 in bills how is this covered in both cases

Answer given on November 11, 2017

In auto insurance, liability limits are offered as a single limit or, as in your case, “split limits”.  The $250,000/$500,000 allows a payment of up to $250,000 per person for bodily injury and a total of $500,000 per accident.  If there are multiple injured parties as in the above case, the insurance company can pay the per person limit of $250,000 for the one injured party.  They will then only pay $250,000 of the $350,000 in injuries.  That meets the per accident threshhold.

If you have $500,000 per person for injury, the one injured at $250,000 will get that amount.  But since the per accident limit remains at $500,000 the most the other party can receive is again $250,000.  The insurance company can choose to pay the $350,000 to the one injured party, but they would then only pay $150,000 to the other party, to meet the $500,000 threshhold.

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