Gary Sortor said:
Good luck.
Okay, good thing I used the "AFAIK" disclaimer because I obviously didn't know. USAIG inserts the following:
"Defending Suits: We will defend any liability suit brought against you for bodily injury, mental anguish, personal injury or damage to property to which this insurance applies, even if the suit is groundless. We will also pay al costs of your defense, including investigation and court costs. We may investigate, negotiate and settle any claim or suit, if we decide this is appropriate. But, we won't be obligated to pay any claim or judgement or to defend any suit after your "Limit of Coverage" has been exhausted by payment of judgments or settlements."
Putting this into context within the three injured parties scenario, what it means is this. If one person has a winnable $1M claim, but you hold a $1M/$100k policy, you are praying that the $1M legitimate claim holding injured person head fakes for $100k settlement rather than pursue the $1M victory in court. If that happens (settles for $100k) you are out nothing and your insurance company will continue to pay court costs for the remaining claims (2) and will pay $100k towards each subsequent settlement or judgment. OTOH, under the $1M/$100k policy, if the injured person pushes it through court and wins a $1M judgment, you must pay $900k but your insurance company will continue to pay legal costs.
By comparison, if you have a $1M smooth policy, the person with the legitimate $1M policy is less motivated to settle for $100k since the pocket is deeper. If the person goes to court and collects a $1M judgment you pay nothing, but you must defend yourself against the next 2 parties.
Looks to me that the decision crux is a personal bet as to whether or not someone with a legitimate $1M claim will head fake and settle for $100k. If they would, I'm best off with the $100k per seat limit policy. If they won't, I'm better off with $1M smooth policy since under the $1M/$100k policy I would be out $900k but defense costs are paid, whereas with the $1M smooth policy I would be $900k protected, but bear the defense costs for all subsequent suits plus all future settlements/judgments.
The crux questions appear to be the head fake motivational factor and when do legal costs approach $900k.