Policy Limit Research | A Legal Professional’s Guide

Effective strategies for policy limit research in injury cases with this comprehensive guide for legal professionals. Uncover coverage and maximize claims.

In litigation, knowledge is power, and when it comes to insurance cases, few pieces of information are more powerful than the defendant’s policy limits. Knowing how much coverage is available informs nearly every tactical decision a lawyer makes, from settlement strategy and discovery scope to whether the case is even financially viable to pursue.

But unlike liability or damages, insurance policy information isn’t always out in the open. This is where policy limit research comes in—a critical, strategic task that every legal professional involved in insurance-related disputes must understand. This guide walks you through the what, why, and how of effective policy limits.

What Are Policy Limits?

Policy limits define the maximum amount an insurer will pay under a specific insurance policy. These can be:

Per person or per occurrence (common in auto policies)

Aggregate limits (e.g., for all claims in a policy period)

Split limits (e.g., $100,000 per person / $300,000 per accident)

Umbrella or excess policies that kick in after primary coverage is exhausted

Understanding the layers and structure of coverage is essential, especially in high-exposure cases like wrongful death, product liability, or professional malpractice.

Why Policy Limit Research Is Essential

1. Case Valuation and Feasibility

Knowing the insurance coverage helps you:

Advise clients early about potential recovery limits.

Decide whether to accept a case on contingency.

Understand whether it’s worth investing in expert witnesses, depositions, or trial.

2. Settlement Leverage

When you know the policy limits, you can:

Issue a policy limit demand with a deadline to pressure the insurer to settle.

Create a record of good-faith efforts to resolve the case—potentially setting up a bad faith claim if they fail to act reasonably.

3. Avoiding Surprise

It’s better to learn early on that a defendant is underinsured than after months of litigation and discovery. Without adequate coverage or assets, a large judgment may be unrecoverable.

When to Conduct Policy Limit Research

Immediately after intake, Especially in PI or wrongful death cases.

Before pre-litigation demand letters: Helps shape tone and amount.

Before filing suit, Knowing coverage can influence where and whom you sue.

During early settlement discussions, Crucial for realistic negotiations.

How to Conduct Policy Limit Research

1. Statutory Insurance Disclosure Requests

Many states require insurers or defendants to disclose policy information upon request, even before litigation is filed. Common elements that must be disclosed include:

Insurer name and policy number

Limits of coverage

Nature of the policy

Whether other coverage exists (umbrella, excess)

Examples:

Florida Statute §627.4137: Insurers must disclose coverage within 30 days.

California Civil Code §11580.2: Requires UIM disclosure within 15 days.

New York CPLR §3101(f): Allows demand for disclosure of “any insurance agreement.”

These statutory letters are typically sent directly to the defendant’s insurer or their counsel and should be drafted formally and include:

Claimant’s name

Date and nature of the loss

Legal basis for the claim

A deadline for response (with statutory citation)

2. Voluntary Disclosure Through Demand Letters

Even in jurisdictions without mandatory disclosure, a well-prepared policy often limits the demand letter often prompts disclosure. Be professional but firm:

Attach medical bills, records, and liability evidence.

Indicate willingness to settle for policy limits.

Include a deadline (e.g., 15 or 30 days) and warn that failure to respond may lead to litigation.

Insurers often prefer early resolution to avoid litigation costs and potential bad faith liability, especially when liability is clear and damages are significant.

3. Informal Discovery and Investigation

If the insurer or defense refuses to disclose, you may have to get creative:

Prior lawsuits: Check court records to see if the defendant has disclosed insurance info in other cases.

Public business records: May show if the defendant has insurance, especially in commercial or transportation cases.

Social media and websites: Businesses may reference “licensed, bonded, and insured,” offering leads.

Secretary of State and DOT filings: Useful in trucking or commercial cases to uncover mandatory coverage.

Private Investigators: Some firms specialize in insurance tracing.

4. Formal Discovery (If Litigation Is Filed)

Under the Federal Rules of Civil Procedure 26(a)(1)(A)(iv), parties must disclose any insurance policy that may cover a judgment. Most state courts have similar rules. If not disclosed voluntarily:

Serve interrogatories and requests for production targeting insurance.

File a motion to compel disclosure if defense refuses.

What to Look For in a Policy Once Obtained

Once you’ve secured the policy details, review for:

Declaration page: Shows limits and named insureds.

Endorsements: May add or limit coverage (e.g., business use exclusions).

Exclusions: Certain acts or damages may be excluded.

Umbrella coverage: Often key in large exposure cases.

Burning limits: Some policies reduce coverage by defense costs.

Understanding the fine print can make the difference between assuming $1M in coverage and realizing only $500K is actually available after defense fees.

Ethical Considerations and Best Practices

Always cite relevant statutes in disclosure demands to avoid delay or rejection.

Be accurate in facts presented in demand letters to maintain credibility.

Document every step: If litigation ensues, your letters and records may support a bad faith claim.

Avoid contact with represented parties: All communication should go through counsel or insurers.

Policy Limit Research in Practice: Real-World Impact

Example 1: Auto Accident

A plaintiff suffers spinal injuries in a three-car pileup. The at-fault driver’s insurer reveals a $50K policy. However, a quick check reveals the driver was working for a delivery service—policy limit research uncovers a $1M commercial auto policy via the employer. That shifts the entire valuation of the claim and leads to a much larger settlement.

Example 2: Medical Malpractice

Policy research reveals the defendant physician has only $250K in malpractice coverage and is judgment-proof personally. The plaintiff’s attorney decides against costly expert depositions and instead negotiates a swift settlement—saving everyone time and resources.

Conclusion

Policy limit research is more than just a pre-trial formality—it’s a core element of early litigation strategy. Whether you’re trying to resolve a case swiftly, assess its worth, or prepare for battle, understanding the scope of insurance coverage gives you a strategic advantage.

Legal professionals who treat this as a must-do step—not an afterthought—will be better positioned to maximize recovery, avoid wasted effort, and hold insurers accountable when they play games with disclosure.