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Dec 23, 2015

Every insurance policy has a limit, and this cap on payouts protects the insurer against excessive risk. However, there are cases when an insurance provider ends up paying beyond the limits of a policy for acting in bad faith. An experienced accident lawyer will be able to advise you on how “opening” an insurance policy occurs. It begins when a reasonable settlement is denied.

Settling an Accident Claim Under Policy Limits

Following an accident, an insurance company will receive offers to settle a claim within the limits of a policy. If the maximum payout is $50,000 and the damages are extensive, the amount requested may be up to $50,000. Insurers have the obligation to take these settlement offers seriously.

In fact, insurers have the obligation to accept these offers when there is a chance the damages involved in the case exceed that amount. When an insurance company refuses to settle a case within policy limits and an experienced accident lawyer in Los Angeles gets on the case, the insurer is at the risk of having to pay all of claimant’s damages, even if a subsequent judgment is in excess of the policy limits, because the policy may be considered “open.”

When a Policy Is Open

Insurance companies are bound to conduct themselves in good faith when an accident occurs, and in most cases this means paying out reasonable claims made for damages. California courts have found that policy limits will not restrict a request for damages when an insurer rejects or ignores a reasonable settlement demand within the policy limits.

Once an insurer refuses to accept a reasonable policy limits demand, a lawyer can help claimants to obtain judgment against the insurance company in court. If the judgment is in excess of the policy limits an insurer may be forced to pay it even though the judgment is in excess of the policy limits.

Contact West Coast Trial Lawyers when you need an experienced and reputable accident lawyer to expertly represent you if an insurance provider is denying your settlement claims. You may be entitled to damages exceeding the policy limit. For further information or to schedule an appointment please contact us at (888) 539-9582 or visit

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