If a judgment exceeds the policy's liability limit, who pays the amount above the limit?

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Multiple Choice

If a judgment exceeds the policy's liability limit, who pays the amount above the limit?

Explanation:
The amount above the policy limit is the insured’s responsibility. A liability policy pays damages only up to its stated limit; if a judgment exceeds that limit, the insurer stops paying at the limit, and the remaining balance must be covered by the insured (from personal assets or any other applicable coverage, like an umbrella policy). The plaintiff can still pursue the excess, but the court doesn’t pay it—the insured does. This is why selecting appropriate policy limits or adding extra coverage matters to protect against high judgments.

The amount above the policy limit is the insured’s responsibility. A liability policy pays damages only up to its stated limit; if a judgment exceeds that limit, the insurer stops paying at the limit, and the remaining balance must be covered by the insured (from personal assets or any other applicable coverage, like an umbrella policy). The plaintiff can still pursue the excess, but the court doesn’t pay it—the insured does. This is why selecting appropriate policy limits or adding extra coverage matters to protect against high judgments.

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