Policy Limits Demands After an At-Fault Injury Crash

Attorney Answer

The benefit runs to you, not to them. Disclosing your limits is usually how a claim gets resolved inside your policy instead of turning into a judgment you pay out of your own pocket. It is not an admission, and it does not commit your insurer to pay anything.

Here is the mechanic behind the request. A claimant's lawyer cannot decide whether to settle without knowing the ceiling. If the limits are modest relative to the injuries, the usual outcome is that the lawyer takes the policy and gives a full release — which ends your exposure. If the limits are never disclosed, that lawyer has no reason to settle early and every reason to keep going. The number itself tells them almost nothing about your assets, and disclosure does not concede that the second person was actually hurt.

What you are protecting against is the part above your limits. A judgment larger than your coverage is yours personally, and California's exemptions are narrower than people expect. Code Civ. Proc. § 704.010 exempts only $7,500 in vehicle equity. Code Civ. Proc. § 704.730 sets the homestead exemption at the greater of the countywide median sale price for a single-family home in the prior calendar year — capped at $600,000 — or $300,000, adjusted annually for inflation. Those protect a slice of what you own. Wages, accounts and other property outside an exemption are exposed.

The size of that gap depends on your policy. For a crash before January 1, 2025, the minimum liability policy under Vehicle Code § 16056(a) was $15,000 per person, $30,000 per accident and $5,000 for property damage. With one confirmed injury and a second person now claiming one, a minimum policy can be exhausted by the first claim alone.

Your insurer's own conduct matters here too. In Boicourt v. Amex Assurance Co., 78 Cal. App. 4th 1390 (2000), the Court of Appeal held that an insurer's refusal to disclose policy limits can expose it to a bad-faith claim even where the claimant never made a formal settlement demand. That case is about the carrier's duty, not yours — but it is why a refusal to disclose is a decision worth questioning rather than accepting.

What you can do

1. Ask your insurer in writing what your limits are, whether it intends to disclose them, and if not, why. Keep the reply. Get your declarations page while you are at it.

2. Write to your insurer stating that you want the claim settled within your policy limits and that you do not want to be exposed to a judgment above them. This is a short letter, it costs nothing, and having it in the file matters later.

3. Route every contact from the claimants or their lawyer to your carrier. Do not negotiate, pay, or promise anything directly — a side arrangement can put your coverage at risk.

4. Preserve the records that already exist: the police report number, photos, repair estimates, and any medical information already given to you. Before you give any statement about how the crash happened — to police, to an investigator, or to the other side — speak with a local criminal-defense attorney.

5. Ask a local attorney whether you should have your own lawyer, separate from the one your insurer provides, given that the exposure may exceed your limits. That question is worth asking now rather than after a verdict.

6. Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts is worth more than any general guidance, including this page.

⏱ Time limits apply. A personal injury claim against you runs under Code Civ. Proc. § 335.1 and its two-year period for injury caused by another's wrongful act or neglect; Code Civ. Proc. § 352(a) can extend it where a claimant was a minor or lacked legal capacity. When those periods started, and whether a settlement demand carries its own response deadline, depends on your facts. Have a local attorney review the dates and any demand letter before you or your carrier respond.