Understanding the Impact of Insurance Limits on Personal Injury Claims
In personal injury claims, it's easy to focus on medical records, lost wages, and legal deadlines. However, the reality is that insurance limits often dictate the maximum compensation a victim can receive, regardless of the severity of their injuries.
An often underestimated aspect of personal injury cases is the insurance policy limit of the at-fault party. When someone suffers a personal injury, the law gives them the right to pursue compensation from the responsible party. But in many cases, that right runs into a financial wall. Insurance companies are only obligated to pay up to the amount stated in the policy.
Once that ceiling is reached, they are not legally required to pay more—even when the damages are far higher. That leaves injured individuals with difficult decisions and limited options.
At Gerstner Law, we’ve helped countless clients in Billings, Montana, and surrounding areas, including Glendive, Miles City, and Sidney, recover damages after serious accidents. Our desire to help people and make a positive difference led us to pursue careers in law. Our attorneys use our years of legal experience, passion for advocacy, and roots in the Billings community to benefit a diverse range of individuals.
Let's try and understand how insurance limits work, how they apply under Montana law, and how we can address these challenges to recover as much as possible in a personal injury case.
What Are Insurance Policy Limits?
Every liability insurance policy—whether it’s auto, homeowner’s, or business-related—has a limit. This is the maximum amount the insurer will pay to settle a claim. These limits are often split into two categories: per person and per accident.
For example, Montana’s minimum auto insurance coverage is currently $25,000 per person and $50,000 per accident. That means if a negligent driver causes serious injuries to multiple people, the insurer is only on the hook for a total of $50,000. Once that money is divided among the injured parties, it may not come close to covering medical bills, lost wages, or pain and suffering.
When our clients experience life-changing injuries, insurance limits often fall far short of what’s needed. That creates a frustrating situation—especially for those who did nothing wrong.
How Insurance Limits Affect Personal Injury Cases
Personal injury claims are typically brought against the person or business that caused the harm. In reality, though, the settlement or judgment is paid by that party’s insurer. The policy limits effectively set the maximum payout unless there’s additional coverage or a way to pursue personal assets.
In Montana, individuals are only required to carry the minimum coverage mandated by law. This means that even in cases of severe injuries, such as traumatic brain injuries or permanent disabilities resulting from an accident, a client may face a policy limit of just $25,000. Unfortunately, scenarios like this occur far more frequently than most would imagine.
What’s worse, some at-fault parties don’t have any insurance at all. In those cases, our clients may need to rely on their own uninsured or underinsured motorist coverage—or seek legal remedies beyond the standard insurance channels.
When we take on a personal injury case, one of our first steps is to determine the available insurance coverage. That helps us assess what can realistically be recovered and how we might structure the case to recover more.
Uninsured and Underinsured Motorist Coverage
Montana drivers have the option to purchase uninsured (UM) and underinsured (UIM) motorist coverage. This type of insurance protects you when the person who caused your injury doesn’t have insurance—or doesn’t have enough.
Many of our clients don’t realize how valuable this coverage is until they need it. UM and UIM policies kick in when you’ve been injured by someone whose own coverage can’t fully compensate you. It’s a key protection in a state where many drivers only carry the legal minimum—or none at all.
We highly recommend that all Montanans invest in robust UM and UIM coverage. In our experience, this coverage often determines whether you receive partial compensation or achieve full financial recovery. However, insurance companies may still challenge your ability to access these benefits.
What to Do When Your Insurance Coverage Falls Short
When the insurance policy limit isn’t enough to cover the full damages in a personal injury claim, we look for every possible avenue to help our clients recover additional compensation. That might include:
1. Stacking Insurance Policies:
In some cases, we can combine more than one applicable policy to increase the available coverage. For example, if multiple policies apply to the same vehicle or household, Montana law may allow those coverages to be stacked.
2. Pursuing Additional Defendants:
Sometimes more than one party contributed to the injury. A business, product manufacturer, subcontractor, or property owner may also share legal responsibility. Bringing claims against multiple parties increases the pool of available insurance coverage.
3. Filing a Claim Against Your Own Policy:
When UM or UIM coverage is available, we assist clients in filing those claims as an integral part of their overall case strategy.
4. Seeking Compensation From Personal Assets:
While more difficult, it may be possible to seek a judgment that allows recovery from the at-fault party’s personal assets, especially in cases of gross negligence or misconduct.
5. Exploring Umbrella or Excess Policies:
Some businesses and individuals carry umbrella insurance, which provides extra liability coverage beyond their primary policy. We investigate whether these policies exist and whether they apply to the injury.
We’ve used each of these strategies to help clients go beyond the basic policy limits and secure a more comprehensive recovery.
The Real Cost of a Personal Injury
Personal injury claims involve more than just doctor visits and lost paychecks. The true cost includes emotional trauma, chronic pain, loss of future earnings, permanent disability, reduced quality of life, and damage to family relationships. These losses often far exceed what any insurance policy is prepared to pay.
Montana law allows victims to pursue full compensation for these damages. But when insurance coverage is capped, the legal right to recovery doesn’t always match the financial reality.
That’s why we treat every personal injury case as a unique challenge—because behind each one is a person whose life has been turned upside down.
We work with medical providers, economists, and vocational experts to show the full scope of what our clients have lost. That’s especially important when the insurance company offers a low settlement based on policy limits without acknowledging the lasting harm.
Why Policy Limits Shouldn't End the Conversation
Insurance companies often use policy limits as a way to shut down negotiations. They claim they’ve paid all they’re required to pay and have no further obligation. But just because a policy limit has been reached doesn’t mean you’re out of options.
We’ve seen cases where a careless driver, business, or contractor caused harm so severe that it justified pursuing personal assets or seeking punitive damages. In rare situations, insurance companies that act in bad faith—by delaying payment or wrongfully denying coverage—can be held accountable through separate legal claims.
At Gerstner Law, we’re not deterred by low policy limits. We approach every case with a full review of the facts, the policies, and the law. That way, we can advise our clients on the strongest possible course of action, even when insurance dollars are limited.
A Closer Look at Insurance Strategy
Personal injury litigation is not just about proving who was at fault—it’s also about developing a legal strategy that accounts for insurance limitations. We pay close attention to how policies are written, how they apply, and what exclusions might be used to deny coverage.
Montana law requires insurance companies to act in good faith. When they don’t, we take that seriously. If an insurer fails to honor a claim in a timely and fair manner, we are prepared to take additional legal action on behalf of our clients.
In some cases, we’ve also had success getting insurers to pay more than the stated limit, especially when their conduct during the claim process was unreasonable or unfair. That kind of outcome doesn’t happen automatically—it takes aggressive legal work and a strong command of Montana personal injury law.
Call for the Next Steps
At Gerstner Law, we look beyond the numbers to build a strategy focused on securing the highest possible compensation. We’re proud to serve Billings, Montana, and the surrounding areas of Glendive, Miles City, and Sidney. We are dedicated to helping you through personal injury claims so you can focus on your recovery. Call today to schedule a consultation.