Unfortunately, you won’t be able to force an insurance company to pay more than the policy limit. You do, however, have the right to sue the at-fault driver for more than the insurance policy’s value. This would imply that a lawsuit will be filed against the driver who caused the accident, rather than the insurer.
The problem is that many drivers do not have the financial means to compensate you for your losses. Even if you win the lawsuit, you might not be able to collect the entire sum. Lawsuits can be costly and time-consuming.
In most circumstances, your lawyer will negotiate with the insurance company to obtain reimbursement for you. This may limit your options if your damages exceed the insurance limitations, but it may be the best option until your lawyer determines that a lawsuit is required.
Can I recover more than the insurance policy limits?
Car accident victims in California have the legal right to sue at-fault parties for damages. After a car accident, may you recover more than your insurance policy limits? You can, in a nutshell, say yes.
What happens if claim exceeds coverage?
When a car accident claim exceeds the insurance limits, one of three things happens: (1) the claim is settled with a personal contribution over the policy limits by the at-fault driver; (2) a jury returns a “over limits” verdict against a collectible defendant; or (3) a bad faith claim or lawsuit is filed, depending on the state’s specific bad faith laws.
When auto accident settlements exceed policy limits and a bad faith lawsuit is filed, it means the at-fault driver’s insurer failed to reasonably settle the claim within the policy limits, exposing their own insured to an excess judgment, and the defendant assigns his or her own bad faith cause of action to the plaintiff in exchange for the plaintiff agreeing not to pursue collection against the at-fault driver.
How do policy limits affect settlement?
In most cases, insurance companies will not pay more than the policy limit. In other circumstances, however, the victim may be interested in looking into ways to suit outside the policy restrictions. If you want to sue for more than the policy limits, you should start by engaging a reputable and skilled personal injury attorney. After the personal injury lawyer has reviewed the policies, claims, and settlement offers for the damages caused by the accident, they will assist you in beginning this difficult path using a variety of methods. Among the possibilities are:
If the losses exceed the policy limitations, you have the option of suing the driver individually for additional damages that exceed the insurance limits. However, before pursuing this strategy, you should first evaluate whether the defendant has sufficient assets to cover the judgment settlement.
When an insurance company fails to settle a claim for damage that exceeds the policy limits, they may face a bad faith suit. If the lawsuit goes to trial, the jury may award a sum that is greater than the policy maximum, putting the company on the line to pay the full amount.
In rare situations, you may be injured in an accident in which more than one party is at blame, which means you may be entitled to compensation from multiple insurance policies. With the help of an expert attorney, it is also simple to establish additional viable possibilities and identify other people who may be at fault.
Some defendants, such as corporations, may have an umbrella insurance that allows you to recover damages in excess of the policy limits. When all previous plans have paid to the maximum, the policy kicks in. As a result, it’s a good idea to try to figure out what kind of coverage the at-fault motorist has.
Who pays the damages that exceed the policy limits?
An injured individual might seek compensation in excess of their insurance policy limits in a number of ways. These are some of the methods:
Suing Additional Defendants
An accident can sometimes be held legally and financially accountable by more than one party. The different defendants may be held “jointly and severally” accountable for the entire amount of damages in many of these circumstances. This means that if there were two defendants, each with a $50,000 policy maximum, both of their policies might likely be utilized to meet a $100,000 judgment.
Of course, several defendants or responsible parties aren’t always present. However, below are some examples of situations in which there may be several defendants:
- Medical malpractice: If both a hospital and a doctor were negligent in giving care to a patient, there could be several defendants.
- Product liability: A defective product’s maker can normally be sued, and a lawsuit against the distributor or even the store where the product was sold may also be feasible.
- Cases of vicarious liability: These are instances in which an agent is operating on behalf of someone else, such as an employee who was involved in an automobile accident while working for the company. According to this theory, the employer has legal responsibility for the employee’s negligence.
Umbrella Policies
Even though there is only one defendant, there may be many insurance policies at play in some cases. Some defendants, particularly corporate entities and large businesses, may have an umbrella policy that “covers” all of their other insurance policies. This type of policy is designed to kick in when the policyholder is faced with a liability that exceeds the limits of the initial policy.
Consider the case of a corporation with $100,000 in liability insurance and a $50,000 umbrella coverage. The first coverage would cover you for up to $100,000 in damages. If the damages surpassed the amount of coverage provided under the first insurance, the second would kick in and pay $50,000 extra.
Umbrella policies are most prevalent among corporate or commercial defendants, but they may also be held by private persons. As a result, it’s best to do your homework and learn about all of the insurance policies that the defendant in your case may have.
Collecting From the Defendant Personally
In many circumstances, if your damages exceed the limitations of the at-fault party’s insurance policy, your only option is to sue the defendant directly. If the defendant does not have any funds or assets to pay you, this can be difficult.
You might be able to go to court and have a judge order wage garnishment or a lien placed on the defendant’s property, but this is contingent on the defendant having wages and property to lien. If a defendant has no money or assets, a judgment in excess of the policy limitations will be nearly impossible to collect.
How often do auto accident settlements exceed the policy limits?
Although auto accident settlements seldom surpass the policy limitations, it is possible to sue beyond the policy limits. However, you will most likely need to seek further income from other sources.
If your claim exceeds your policy limitations, there are a few options for obtaining additional damages.
Umbrella Policy
You may be able to recover further damages under the defendant’s umbrella policy if he or she has one. After other policies have paid out their maximums, umbrella plans kick in.
Umbrella plans are more common among corporate defendants, such as transportation companies, than among individuals. However, it’s crucial to figure out what kind of insurance the defendant has. That way, you’ll be able to tap into as many resources as possible to guarantee you’re adequately compensated.
Multiple Defendants
You may be able to recover under numerous insurance plans if more than one individual is responsible for the accident. If you were hit by a delivery truck, for example, both the driver and the trucking business may be held accountable.
If each insurer has a $50,000 bodily injury policy maximum, you might possibly recover up to $100,000 from both insurers if your injuries warrant it.
Personal Judgment Against the Defendant
Remember that the defendant is the one who is ultimately responsible for the accident. The insurance company is only obligated to pay damages because of a contract with the defendant.
You may be entitled to a judgment for more than the policy limitations if your damages are larger than the defendant’s insurance policy limits. You may be able to collect the balance of the judgment by garnishing the defendant’s salary or enforcing a lien on their property.
Bad Faith
If an insurance company denies a claim despite knowing that it should be allowed, it may be acting in bad faith. A jury could impose damages in excess of the policy limitations if the insurance company refuses to agree into a reasonable settlement that is less than the policy limits.
Can I be sued after insurance settlement?
Yes, you can sue the insurance company after you’ve reached an agreement with them.
However, there’s a good chance that the judge will dismiss your complaint. The defendant will inform the judge of the settlement agreement once the judge has heard your lawsuit. The judge may decide to dismiss the case at this time. After all, the settlement agreement indicates that you agreed not to pursue any more payments.
If the judge dismisses your lawsuit for this reason, you may be responsible for the defendant’s legal fees and other costs. It’s possible that your post-settlement litigation will cost you thousands of dollars.
What if I cause an accident that costs more than my liability limit?
What happens if you are at fault in a car accident and the property damage exceeds your insurance limits? Is it truly up to you to take care of the rest?
Yes, if your automobile insurance coverage limits are exceeded as a result of damages you caused in an auto accident, you might be held personally liable for charges not covered by your policy.
Your car insurance company will only pay up to the limits you purchased, no more. That is why, if you are financially able, it is always recommended that you purchase larger limits than what your state requires.
Typically, state-mandated minimum bodily injury and property damage liability limits are minimal. If you’re in a serious accident, hit something valuable, or cause damage to many vehicles, your liability limits are likely to be insufficient to cover all of the damages, leaving you personally liable. (See also Expensive automobile, low-cost insurance.)
What is the maximum limit on how much an insurance company will cover?
A limit is the maximum amount your insurer will pay for a claim covered by your policy. Consider the following scenario: It’s like putting food into a fishbowl. Your insurance coverage will pay up to a specified amount if you file a covered claim. Any expenses that exceed the limit are your responsibility.
How do insurance companies determine settlement amounts?
The amount of a settlement is determined by three factors: responsibility, damages, and the conditions of the insurance policy. Liability must be established before an insurance company may offer a payout. If the insured party is found to be responsible for the claim, the next step is to determine the victim’s losses. Finally, the insurance company examines the policy in question to establish the sorts of losses covered and the policy limitations. When determining settlement amounts, insurance companies take into account all of these criteria.
Fault in a car accident
The insurance company considers legal fault first when determining a settlement sum. To put it another way, the insurance company will only pay if the insured individual or their insurance company is legally liable for the accident. The legal liability of a person for an accident is determined by state laws and the facts of the case.
Keep in mind that the state of Pennsylvania has a complicated, hybrid system for settling car accidents, and legal blame may not always be obvious. Under no-fault regulations, an insurance company is required to reimburse the insured driver directly in many circumstances. The insurance company will proceed to process the claim if the driver is legally liable. The insurance company may give a lesser settlement if there is a reasonable disagreement concerning liability.
Amount of damages in a car accident
After legal liability has been established, the insurance company examines the damages to calculate the settlement amount. Financial losses, such as medical bills, and vehicle damage are examples of damages. Depending on the specific facts of the case, pain and suffering may be added. Many people who try to manage their cases on their own overlook critical categories of losses that might significantly raise the insurance settlement amount. An expert personal injury lawyer can ensure that your claim to the insurance company is complete.
Why do attorneys ask for policy limits?
A request for policy limit information is frequently made soon after an accident or “event” in which someone is injured, blames another, and claims compensation. The insurance carrier is usually contacted by an attorney or a public adjuster who requests policy limits.