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Per-Occurrence Liability for Auto Insurance

An automobile insurance policy can limit liability to a certain dollar amount for each accident or occurrence of loss suffered by an insured. Generally, per accident and per occurrence mean the same thing. One occurrence is a single, uninterrupted cause that can result in one or a number of bodily injuries or property damage. For example, if an insured’s vehicle hits a car and that collision breaks the steering gear on the insured’s vehicle causing it to hit another car, then only one accident occurred within the meaning of the insurance policy limitation. Therefore, there can be multiple claims of injuries and damages that arise from one accident.

 

If a cause is interrupted or replaced by another cause, then the chain of causation is broken and more than one accident has taken place. For instance, if an insured driver sideswipes one vehicle, then the driver travels down the road, crosses the center line, and collides head-on with a car coming from the other direction while trying to avoid a deer in the road, then two accidents have happened.

 

Whether one or more than one occurrence has happened is very important to those injured by the insured and to the insurance company that issued the insured’s policy. If an insured’s van strikes three motorcycles carrying five persons and the insurance policy limits coverage to $10,000 per occurrence, one occurrence will make the company liable for not more than the $10,000 policy limit. If three accidents occurred, then the insurance company could have to pay out $30,000.