A policy limit in an auto insurance policy refers to the maximum amount of money that the insurance company will pay out for a covered loss.
For example, let’s say you have a policy limit of $50,000 for property damage. If you are in an accident and the damages to your vehicle and any other property (such as a fence or building) total $60,000, you may only be able to recover $50,000 from the insurance company. But also remember, other factors may come into play in a situation like this.
Policy limits can vary based on the type of coverage and the specific terms of your policy. It’s important to understand your policy limits so you know what to expect in the event of an accident. It’s also important to consider whether your policy limits are sufficient to cover the potential damages in an accident. If you are concerned that your policy limits may not be high enough, you may want to consider increasing them or purchasing additional coverage.
In terms of how much you can recover from the insurance company if you are in an accident, it will depend on the specific details of your policy and the damages you incur. As mentioned above, your recovery will be limited to your policy limits, but it will also be subject to any deductibles you may have and any exclusions or limitations that are stated in your policy. It’s important to review your policy carefully and understand what is covered and what is not so you know what to expect if you are in an accident.
There are other very important factors (for example: the Stowers Doctrine) or a number of other legal considerations which could be explained to you by an attorney. The above is a very brief and basic explanation.