When someone is injured in an accident, it’s typical for them to make an insurance claim. As an insurer, your goal is to make sure they get what they need but not more than what they deserve based on your policy limits.
While there are time limits to make a claim, there generally are not excessive limits on the amount you can claim from an accident. However, insurers are largely protected thanks to the contracts limiting their liability.
That being said, Michigan has two personal injury damage caps that you should know about. The first is for medical malpractice, and the second is for product liability.
Medical malpractice caps
For medical malpractice, there have long been caps on the amount someone can claim. Non-economic damages are limited to $280,000 for most cases, while they may go as high as $500,000 in others when severe or permanent injuries occur.
Product liability caps
Product liability caps also exist. These limit the ability to claim for injuries related to defective products to $280,000. Sometimes, if the injuries suffered are severe enough, the amount of non-economic damages may be increased up to $500,000.
It’s important to note that both of these limitations are on non-economic damages, not actual financial losses.
Is there a limit on a claim due to insurance limits?
Using an auto accident as an example, imagine that the insurance limit is $50,000. The victim may not be able to seek more than $50,000 from the insurance company. That doesn’t mean you they can’t sue the person responsible for their injuries, though, in some cases.
In that respect, there is not a true limit to a claim, even though the victim may not be able to collect more from you as an insurer.
Victims of injuries have a right to seek compensation
For most victims, healthcare costs, pain and suffering, property repairs, a loss of earning capacity and other damages could be paid out to them for what they’ve been through. Non-economic damages are harder to quantify, which is why many states, including Michigan, have limits in certain kinds of cases where there is a potential for a wide variance in the amount of awards. Good insurance defense will help your company fight against unfair or unrealistic claims, so you can protect your bottom line.