Most people don’t notice on the declarations page of their auto policy that they have coverages based on both per person and per accident.
In Georgia for example, when you purchase the state minimum amount of insurance coverage, those policies are issued as $25,000 per person and $50,000 per accident.
So what happens when three or more people are injured due to the negligence of a driver with a 25,000 / 50,000 policy? This is potentially problematic if the damages are severe enough to at least two parties.
Let’s say there are at least two of the parties have damages that warrant $25,000 each. Should the insurance company agree and payout the policy limits of $25,000 each to the first two claimants, then they have exhausted their entire $50,000 obligation. As such, when the third injured party comes calling with a demand for even a small amount of money, the insurance company can tell that claimant that they have no further financial obligation under the policy.
The insurance company’s obligation in these scenarios will vary by state. In Georgia it is basically a first come first serve approach. In other words, the insurance company does not need to consider or set aside money for demands it has not yet received just because it knows there are more than two claimants.
This is why when you are involved in an auto accident and the police report indicates there are more than two parties who were injured through someone else’s negligence, it is important that you consider the possibility that you might need to make an offer sooner than you would ordinarily.
Additionally, this is why it is so important to carry enough uninsured motorist. Should the liability carrier have tendered its limits before you could get in your demand and you have a de facto claim against an uninsured driver at that point, you can still make demand on your uninsured motorist carrier if you have coverage.