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“Opening Up” or “Popping” The Insurance Policy Limits in California

Updated: Jun 11



The Insurance Companies Are Not Always Right.

When it comes to paying out a claim, all insurance companies have an obligation under the law to put their insureds’ interests ahead of their own. Insurance companies also have a duty to defend its insured in court, when necessary. Unfortunately, because insurance companies are in the business of saving money and not cutting checks, they often lose sight of these obligations.


When an injured victim is involved in a car accident, one of the first things that usually occurs is an insurance claim made to the other driver’s insurance company. In many cases, the injuries that were caused by the other driver’s negligence may exceed the policy limits. Yet, the insurance companies frequently may refuse to settle with the injured victim within or at the negligent driver’s policy limits and instead would want to take their chances in trial. When insurance companies do this, they are choosing their interests over their insureds’, since they are the ones who stand to lose if the insurance company’s gamble does not pay off. The California Supreme Court has explained that the duty to settle is important “to protect the insured from . . . the insurer’s gamble—on which only the insured might lose.” (Murphy v. Allstate Insurance Company (1976) 17 Cal.3d 937, 941.).



“Opening Up” The Policy Limits

At Razavi Law Group, we work diligently and aggressively on each clients’ behalf to make sure that they receive the correct compensation for their injuries. If the insurance company refuses a reasonable settlement offer within the policy limits, it is playing a dangerous game. If, ultimately, “the judgment exceeds the policy limits,” the insurance company is liable “for the entire judgment,” including the amount in excess of policy limits. (Blue Ridge Ins. Co. v. Jacobsen (2001) 25 Cal.4th 489, 502.) This is what is typically referred to in the industry as “opening up” or “popping” a policy. Although “opening up” a policy may not be a typical and everyday event, it does serve as a strong card to keep in our back pockets if we ever need to remind an insurance company that are acting out of line by denying our clients the policy limit.


How Do You Actually “Open Up” The Policy Limit?

There are several steps that must occur before a policy can be “opened up.” First, the claimant must make a reasonable settlement offer within the policy limits, a demand that is “plainly beyond the policy limit” will not open the policy. Next, the claimant or their attorney must provide the insurance company with enough access to all information such as medical bills and records reasonably necessary to make a decision on the claim. Additionally, sufficient time (usually 30 days), must be allowed to the insurance company to consider and evaluate the demand and information about the claim. An unreasonably short time frame may prevent the policy from opening up. Furthermore, the claimant must offer a full release of liability relating to the accident. Finally, the offer to settle must be a “reasonable settlement” offer under the circumstances. Whether an offer is reasonable, in many cases, is a highly debatable and factual question.


How We Can Help

At Razavi Law Group, we know the tricks that insurance companies try to play to avoid paying you what you deserve. If you have been injured in a car accident in California, give us a call. We will evaluate your case and see if it is an appropriate case to demand the policy limits. If we do so, we will make sure to provide the negligent driver’s insurance company with any reasonably necessary information so that they can make an informed decision, so that any refusal to pay those limits will risk opening up the policy.



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