Car accidents are a common and unfortunate part of daily life. When they happen, they can lead to a complex and emotionally taxing legal process, particularly when the damages caused by the accident exceed the insurance policy limits of the at-fault party.
When the damages resulting from an accident exceed the policy limits of the at-fault driver, you may be left with gaps in compensation. It is particularly problematic in severe accidents that involve extensive injuries, property damage, or both.
In such cases, you may wonder how to secure fair compensation for your injuries, property damage, and other losses. Because every case is unique, discussing your rights and options with a car accident attorney is important. A lawyer can provide personalized guidance and determine how to get the most favorable result.
What are Insurance Policy Limits?
Before discussing what happens when a car accident exceeds insurance coverage limits, it’s essential to understand insurance policy limits and how they work.
Insurance policy limits refer to the maximum amount an insurance company will pay to cover a claim. These limits are set in the insurance contract and can vary widely depending on the type of insurance, the specific policy, and the insurance provider. In the context of auto insurance, types of coverage can include:
Liability Coverage
Liability insurance is the most common type of coverage that addresses damages to others when you are at fault for an accident. It generally covers:
- Bodily injury liability: Covers medical expenses, lost earnings, and pain and suffering for the victims injured in the accident.
- Property damage liability: Covers the cost of repairing or replacing property damaged in the accident, such as another person’s car, fences, or buildings.
The liability limits might be expressed in a format like “$100,000/$300,000,” where the first number is the per-person bodily injury limit, and the second is the total amount the insurer will pay for bodily injuries per accident (across multiple victims).
Uninsured/Underinsured Motorist Coverage (UM/UIM)
Uninsured/underinsured motorist coverage kicks in when the at-fault driver has no insurance or insufficient insurance to cover the full extent of the damages. Some states require drivers to carry this type of coverage and have varying laws about how much coverage a driver must carry. In other states, this type of insurance coverage is not required but rather optional.
Collision Coverage
Collision coverage is optional coverage that helps pay for damages to your vehicle in the event of a crash, regardless of who is at fault. However, this only applies to your vehicle and is not concerned with injuries or damages to others.
Comprehensive Coverage
Comprehensive insurance is also an optional coverage that pays for damages to your vehicle from non-collision events like theft, vandalism, or natural disasters.
What Happens When Insurance Policy Limits Are Exceeded?
When the cost of medical care, property damage, and other expenses related to a car accident exceed the at-fault driver’s insurance policy limits, you may struggle to recover the full amount of your damages. In such situations, there may be several potential courses of action, such as:
Pursuing a Personal Injury Lawsuit
You may consider filing a personal injury lawsuit if the responsible driver’s insurance coverage does not cover all the damages. The lawsuit can be brought directly against the driver to recover the amount the insurance policy does not cover.
In some cases, other parties share responsibility for an accident. For example, if a hazardous road condition played a part in your collision, a governmental entity may be liable, or the driver’s employer may also be at fault if the driver was working at the time of the crash. Whenever a third party has a hand in your accident, you can also file a lawsuit against them.
If filing a lawsuit is an option, your car accident lawyer can discuss the process with you in detail and create a plan for your case.
Making a Claim Against Your Insurance (If Applicable)
Many states require drivers to have minimum amounts of insurance, including uninsured or underinsured motorist (UM/UIM) coverage. If the responsible driver’s policy is insufficient, your own UM/UIM coverage can step in to cover the gap. It is particularly helpful when the other driver doesn’t have enough insurance or is uninsured.
For example, if the other driver has a liability limit of $50,000, but your damages total $150,000, and you have $100,000 in UM/UIM coverage, your insurer may pay the remaining $100,000 of your claim after the at-fault driver’s insurance has paid its maximum limit.
While UM/UIM coverage can offer valuable protection, the amount of coverage you carry will affect how much additional compensation you can recover. After your accident, you can review your available coverage with your lawyer.
Filing Claims for Other Available Coverage
In addition to liability, UM/UIM, and collision coverage, other types of insurance may come into play after an accident, depending on your state and the circumstances:
- MedPay (Medical Payments Coverage): This coverage helps pay medical expenses regardless of who is at fault. It’s a good option for covering the immediate treatment costs, especially if the liable party’s insurance is insufficient.
- Personal Injury Protection (PIP): PIP is a type of no-fault insurance available in certain states. It pays for medical expenses, lost earnings, and, in some cases, other out-of-pocket expenses, regardless of who caused the accident. PIP may be the go-to avenue to cover your damages following a collision if you live in a no-fault state.
Although these forms of coverage can assist with medical costs and other expenses, they still may not cover all damages in catastrophic cases. In many instances, victims must explore other legal options to recover the remaining amount.
Injuries Most Likely to Qualify for Additional Compensation
In many situations, car accident victims can pursue additional financial recovery. However, in many cases, victims who suffer serious, life-changing injuries are typically better able to secure settlements and awards that exceed policy limits, such as:
- Traumatic brain injuries
- Spinal cord injuries
- Severe burns
- Crush injuries
- Loss of limbs
Injuries that require substantial medical treatment, including surgeries, long-term rehabilitation, and hospitalizations, are much more costly and often lead to expenses that far exceed insurance policy limits. When this is the case, victims are more likely to have the opportunity to obtain the monetary recovery they deserve.
Types of Damages You Can Recover After a Car Accident
Car accident victims may be entitled to various forms of compensation, known as damages, depending on the nature of the accident and the injuries sustained. Several types of damages may be awarded in a collision claim, including:
Economic Damages
Economic damages are tangible and quantifiable costs related to the accident. They typically include:
- Medical expenses: Past, present, and future medical bills resulting from injuries sustained in the accident, including emergency room visits, surgeries, rehabilitation, and medication.
- Property damage: The cost of repairing or replacing your vehicle or other personal property damaged in the crash.
- Lost earnings: Compensation for the income you lost due to being unable to work due to the accident, including future lost earning potential if the injury causes long-term disability.
- Out-of-pocket expenses: Costs like transportation to medical appointments, home modifications due to injury, and other financial burdens directly related to the accident.
Economic expenses are often covered and easier to prove and calculate, as strong evidence is usually available.
Non-Economic Damages
Non-economic damages compensate victims for intangible losses that are harder to quantify. These may include:
- Pain and suffering: The physical and emotional suffering caused by the accident, including chronic pain, mental anguish, and loss of quality of life.
- Emotional distress: Anxiety, depression, and psychological trauma resulting from the accident, particularly in cases where the injury is severe or life-changing.
- Loss of consortium: Compensation for the loss of companionship, affection, and intimacy with a spouse due to the injuries suffered in the accident.
More evidence is needed to prove and calculate non-economic damages, which are often calculated using special formulas, including the multiplier and per-diem methods.
Punitive Damages
Punitive damages are awarded in cases where the at-fault driver’s actions were reckless, malicious, or grossly negligent. These damages are meant to punish the wrongdoer and deter similar behavior in the future. Punitive damages are rare and usually apply in cases involving DUI, road rage, or other extreme misconduct.
How a Car Accident Attorney Can Help You Obtain the Compensation You Need
Navigating a car accident claim can be overwhelming, especially when insurance limits are exceeded. A skilled car accident attorney can help ensure that you pursue all available avenues for compensation, even when the at-fault driver’s insurance policy falls short. Here are some of the key ways a lawyer can assist:
Evaluating the Full Extent of Your Damages
An experienced attorney can assess the full scope of your damages, including long-term medical needs, lost earnings, and pain and suffering. They will work with medical experts, economic analysts, and other professionals to quantify your losses and ensure you are pursuing fair compensation.
Gathering Pertinent Evidence
A major part of proving your damages is presenting strong evidence. A car accident lawyer can thoroughly investigate your car crash, collect evidence – including police reports, medical records, and witness statements – and use the evidence to substantiate your claims, strengthen your case, and get you proper financial recovery for your losses.
Negotiating with Insurance Companies
Insurance companies often offer settlements that are lower than what you are entitled to, especially when the policy limits are exceeded. A car accident lawyer can negotiate with insurance adjusters to secure a higher settlement or pursue other legal options, such as filing a lawsuit or making a claim against your own underinsured motorist coverage.
Litigating Your Case
If settlement negotiations fail or the other party’s insurance is insufficient, your attorney can help file a lawsuit against the at-fault driver and pursue a court judgment. In cases where the defendant lacks sufficient assets, your lawyer may help identify other responsible parties or sources of compensation.
Ensuring a Fair Outcome
A big part of a lawyer’s job is to ensure that you don’t settle for less than you deserve. They can help handle the complexities of the legal system, protect your rights, and hold the responsible parties accountable.
Giving Peace of Mind
Experiencing financial stress after a car crash can be challenging on its own, but even more so when you’re worried about whether or how you’ll get all of the compensation you need. An attorney can support you and give you the peace of mind you need during a trying time as they work diligently to get you the financial recovery you’re entitled to.
Following an Auto Collision, Seek Legal Assistance to Secure Proper Financial Recovery
When a car accident exceeds insurance policy limits, victims face a complex and challenging road to obtaining full compensation for their losses. While insurance policies set specific coverage limits, various legal and insurance options are available to help victims recover additional compensation.
Multiple avenues exist, from pursuing a personal injury lawsuit to utilizing underinsured motorist coverage. A car accident attorney plays an important role in helping victims navigate these challenges, ensuring they recover the maximum compensation they are entitled to and protecting their rights throughout the legal process.
Working with an experienced lawyer can significantly increase your chances of obtaining favorable financial recovery for your injuries, pain, suffering, and financial losses—no matter how high the damages exceed insurance limits. They will have the knowledge and experience to gather evidence, negotiate with insurance companies, and fight for your rights in court if necessary.
Furthermore, an attorney can help you identify alternative sources of compensation when insurance limits are insufficient. Your seasoned personal injury attorney will explore options such as pursuing a claim against the at-fault driver's assets, seeking compensation from other liable parties. In the situations where an accident exceeds insurance limits, it's always best to consult with a lawyer as soon as possible. Don’t delay, call today.
Robert Bohn, Jr.
Attorney
For more than 40 years, the lawyers at Robert Bohn, Jr. has dedicated their practices to personal injury law, representing people who have been injured or damaged due to the negligence or carelessness of others. For most people, handling a personal injury claim can be complicated and stressful.
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