Settling for Policy Limits vs. Pursuing the Full Value of Your Claim

Pros

• +Fast, certain payment up to the maximum the policy will pay
• +Avoids the difficulty and expense of collecting against personal assets
• +A timely policy-limits demand can expose the insurer to a bad-faith claim if refused
• +Practical when the defendant is judgment-proof with no recoverable assets
• +Eliminates the risk and cost of prolonged litigation

Cons

• −The policy limit may be far below the true value of catastrophic injuries
• −Signing a release usually waives all further claims against that defendant
• −You forgo recovery from the defendant's personal assets even when substantial
• −Future medical costs may exceed the limited amount you accepted

Pros

• +Targets every available coverage source: liability, umbrella, UM/UIM, and third-party policies
• +Can reach the defendant's personal assets when damages exceed insurance
• +Holds wealthy or corporate defendants fully accountable for the harm caused
• +May uncover additional defendants with their own insurance coverage
• +Appropriate when permanent or catastrophic injuries demand maximum compensation

Cons

• −Collecting against personal assets is difficult — many defendants are effectively judgment-proof
• −Litigation extends the timeline by months or years
• −Higher legal costs reduce net recovery if additional sources are not found
• −A large verdict is worthless if it cannot be collected
• −Asset investigations and post-judgment collection require specialized effort