Being involved in a California car accident is a stressful experience, but it can become even more complicated when the damage exceeds the insurance policy limits. Understanding what happens in these situations is crucial information you need to know. Here is a detailed guide on what to expect when a car accident claim exceeds insurance limits and the steps you can take.
When your claim for damages exceeds the at fault party’s insurance coverage, you may be able to file a further claim for the balance owed you against the Uninsured or Underinsured Motorist coverage on your own auto policy. You also may be able to file a lawsuit against the at fault driver personally for the difference between the available insurance coverage and the amount of your damages.
Understanding Insurance Policy Limits
Insurance policies have limits that cap the amount an insurance company will pay for a covered loss. These limits are typically divided into two main categories:
Bodily Injury Liability: Covers medical expenses and lost wages incurred and reasonably expected to be incurred in the future, pain and suffering, emotional distress, and other costs associated with injuries to others.
Property Damage Liability: Covers damage to another person’s property, such as their vehicle or contents inside their vehicle damaged in a car crash (a laptop, etc).
For example, an insurance policy might have a $50,000 per person limit for bodily injury, a $100,000 per accident limit for bodily injury, and a $25,000 limit for property damage. What this means is the is the maximum amount the insurer is legally obligated to pay under the policy and insurance contract between the insurer and the insured.
When Damages Exceed Policy Limits
If the damages from a car accident exceed the at-fault driver’s insurance policy limits, the injured party can face a significant shortfall in compensation. Here’s what typically happens next:
Negotiation with the Insurance Company
Initially, the injured party’s attorney will negotiate with the at-fault driver’s insurance company. The goal is to maximize the payout up to the policy limits. In some instances, insurance companies may offer the maximum amount available under the policy to avoid further legal action. However, without an attorney representing you, insurance companies often try to deny the claim, claim you were also at fault which makes them have to pay less out, or make low ball offers to settle for less than the value of the claim. More often than not, it’s in your best interest to have an attorney handling any negotiations with an insurance company. An attorney possesses the ability to take legal action and file a lawsuit, whereas an injured claimant often does not have the ability to file a lawsuit on their own. For this reason, among others, insurance companies are more cautious when dealing with a claimant’s lawyer and less likely to engage in tactics they use against claimants unfamiliar with the legal process or their claim’s value.
Pursuing the At-Fault Driver Personally
If the insurance coverage of the party at fault is insufficient, the injured party can opt to pursue the at-fault driver personally for the remaining damages. This can involve:
Filing a Lawsuit: The injured party can sue the at-fault driver for the amount they are owed. If successful, the court may issue a judgment requiring the at-fault driver to pay the full damages.
Asset Seizure: If the at-fault driver has significant assets, such as property or savings, these could be seized to satisfy a court issued judgment after obtaining a judgment at trial.
Wage Garnishment: After trial and judgment in your favor, a court may order a portion of the at-fault driver’s wages to be garnished until the judgment is paid off.
Underinsured Motorist Coverage
Underinsured Motorist (UIM) coverage is an additional protection that can be included in your own insurance policy. When the at-fault driver’s insurance is insufficient and you have UIM coverage, your attorney may be able to file a claim with your own insurance company to recover the remaining damages up to the amount of your Underinsured Motorist policy limits. Check with your attorney to determine if this will apply in your case and if it does, the amount that would apply and the deadline in which to assert a claim.
Umbrella Insurance Policies
An umbrella insurance policy provides extra liability coverage beyond the limits of your standard auto insurance policy. It can protect you if you’re at fault and the damage caused exceeds your primary policy limits. If the at-fault driver has an umbrella policy, it may add a layer of coverage over their auto policy limits to cover your injury claim and any excess damages. Your personal injury attorney will be able to research all available sources of compensation for your claim. They will also know how all of these coverages apply, any interplay between your policy and the at fault driver’s policies, as well as deadlines to assert claims for compensation under all policies available.
Bankruptcy Considerations
If the at-fault driver does not have sufficient assets or income to satisfy a judgment after your case goes to trial, they may consider filing for bankruptcy. Bankruptcy can discharge certain types of debt, including judgments from car accidents, depending on the circumstances and the type of bankruptcy filed. However, not all debts are dischargeable, and this process can be complex.
Restitution in Criminal Cases Against an At Fault Party
In accident cases where the at fault driver was drunk driving and was arrested, if a criminal case is pending alongside your personal injury case against them, you may be able to seek restitution against the drunk driver in the criminal case. Criminal restitution awards are often not dischargeable in bankruptcy. Restitution can include compensation for wage losses, medical bills, and more.
Steps to Take if You’re the Injured Party
If you’re facing a situation where the at-fault driver’s insurance is insufficient to cover your damages, consider the following steps:
Consult an Attorney: An experienced personal injury attorney can help you navigate the complexities of your case and explore all available options for compensation.
Review Your Insurance Coverage: Ensure you have adequate UIM coverage limits as there are a substantial number of under insured drivers out there who are carrying a minimum policy limit. Also consider purchasing an umbrella policy for additional protection in case you are at fault for an accident.
Document Your Damages: Keep thorough records of all medical expenses, lost wages, property damage, and other costs related to the accident.
Conclusion
Navigating a car accident claim that exceeds insurance limits can be challenging, but understanding your options and then taking proactive steps can help ensure your financial interests are protected. Working with a skilled personal injury attorney and ensuring you have adequate insurance coverage are key strategies for managing these complex situations and maximizing your recovery. If you find yourself in this position, don’t hesitate to seek expert legal advice from a skilled car accident lawyer to guide you through the process and ensure you receive the compensation you deserve.
If you have been Injured in an accident, contact us for help
If you or someone you know has been involved in a car accident, don’t wait to seek legal advice. Contact The Hassell Law Group today at (415) 334-4111 or visit our website to schedule a free consultation with our top-rated legal team. Let us help you protect your rights and obtain the compensation you are entitled to.
The general information provided on this website should not be considered legal advice and does not constitute legal advice. For legal advice, you should consult directly with an attorney. If you contact us by telephone, email, letter, or by contact form submission through this website, please note that such communication does not create or constitute an attorney-client relationship. We cannot act as your attorney until we are hired as your attorney by a formal written agreement.
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