Docar is right, you are still making this harder than it needs to be.
I assume that an insurance company can not settle (our of court) for a higher $X than the policy limits allow = ??.
Not correct. The insurance company lawyer can do that, with the consent the of the client (the negligent driver). The insurance company, however, would only pay up to the policy limit and the extra the negligent driver would have to pay from his own pocket.
Use this example. There are two at fault drivers and both have limits of 25 for injury. If the liability is shared the "total" of the % can not be greater than 100%. Wrong?
Again, start with what your ACTUAL DAMAGES are. Forget about policy limits for a minute. Let's say your actual damages are $60,000. That's what you are entitled to get from the negligent parties. But however the fault is allocated, the insurance company will only pay the policy limit for that driver. So, if the policy limit for each driver is $25,000, that's the max the insurance company will pay for that driver. If each driver were deemed 50% negligent then each would owe you $30,000 in damages. But the insurance company will only pay the max limit of $25,000 on each policy. So you'd get $50,000 from the insurance company and you'd have to get the other $10,000 directly from the negligent drivers ($5,000 each).
Let's says instead that driver A is determined to be 75% at fault and driver B is 25% at fault. We again start with your actual damages. Now driver A is liable to pay 75% of $60,000 = $45,000. Driver B is at fault for 25%, so his liability here would be $15,000. If A's policy limit is $25,000, that's all the insurance company will pay toward the $45,000 he owes you; the remainng $20,000 you'd have to get from A himself. If Driver B also has a policy limit of $25,000 then the insurance company will pay you all of the $15,000 that driver B owes you, so you don't have go after driver B for anything extra.
Again, you focus here first on your actual damages. That is what you are entitled to get. That's the start for computing the dollar amounts each of the neligent parties will owe you. The percentage of fault is applied to your damages, not to the policy limits. That is the mistake you are making with this:
The numbers can change if, for example) one driver has 25 and the other has 50. Now the insurance company can decide the %'s that are in their best interest. If the lawyer wanted 30, the insurance company would not let the the 50 policy be liable 60% and the smaller policy 40%. That adds up to .60 x 50 + .40 x 25 = 40K. They would go 0% for the larger policy and 100% for the smaller. Maybe 10-90 which would be 10% of 50 and 90% of 25 = 27,500.
First, the insurance company should not play around with the fault simply to minimize what it pays. It needs to determine what fault a court is likely to assign since, if its clients get sued, that is what the insurance company will have to deal with. Second, you are starting with the wrong premise that the fault is applies to the policy limits and then that determines what you get for a settlement. That's not how it works. The allocation of fault is applied to the actual damages you suffered to determine what each party owes you. Then the policy limits get looked at to determine how much of what each party owes the insurance company is responsible to pay.
So, let's look at my example of the $60,000 of actual damages with the limits of 25,000 for A and $50,000 for B. Again the policy limits have nothing to do with what your damages are. Your damages are $60,000 regardless of how the fault is allocated and regardless of policy limits. All that the allocation of fault and the policy limits does is determine who pays what part of that $60,000 that you are due for your injures. So if A was 60% at fault, then he owes you $36,000 (60% of $60,000). His policy limit is $25,000. So that is all the insurance company must pay for his part of it. You'd have to get the remaining $11,000 directly from A. B was 40% at fault and thus owes you $24,000. His policy limit is $50,000. So the insurance company will pay out all of the $24,000 that B owes you.
I hope these examples and the description of how it works clarifies things for you. You're making it much more difficult than it should be.