George / It Can Happen To You

George is a friend of mine from Kiwanis Club. One rainy day, while volunteering for a community project, George had an accident with his car. The accident was the kind that happens every day, but people in the other car were hurt and went to the hospital by ambulance. They were released the same day. This part is true…as is one of the following stories.
Story 1
George bought auto insurance, but he only carried minimum limits of liability. Even though his agent had discussed buying higher limits, his budget was tight and he chose not to spend more than he absolutely needed to.

          Three months after the accident, he received a letter from an           attorney. He opened the letter and found legal documents saying           that the driver of the other car was suing him for $500,000.

George knew that he only had $25,000 coverage, and a wave of panic swept over him. What about his house and his savings? When he regained his composure, he called his insurance company and told them about the suit. They said they would help.

          George’s insurance company contacted the attorney, and because           they already knew that George was at fault, and that the driver           had been injured, they wrote a check for $25,000 (the policy           limits that George had on his insurance). The attorney said            “thank you very much, but what about the other $475,000? The           insurance company said that they were only obligated to pay the           policy limits, and that at this point, they were done with the case.            They notified George.

The driver’s attorney contacted George, and said that they needed more money and would see him in court. Later, the court found George responsible for the accident but found that the actual damages were less than the $500,000 they were asking for. To pay the court, and his own attorney, George sold his house and now lives in a 1 bedroom apartment.

Story 2
George had worked hard to buy his home and put some money away, and had a company pension, so he bought $1million liability insurance. After the wave of panic had subsided, he called his insurance company. Because the company had so much money at risk, they hired investigators and professional witnesses, and settled the law suit for only $35,000. George’ company paid all of his defense, they also paid for the investigators and witnesses, and finally paid the $35,000 to the driver’s attorney. George paid nothing. 

The true story is the one with the liability limits you           have chosen.