What Happens When a Car Accident Claim Exceeds Insurance Limits?

Car accidents are frequent occurrences on Southern California roads, including the heavily trafficked 405 freeway and scenic Pacific Coast Highway. However, individuals involved in these crashes often face unexpected difficulties in obtaining just compensation from insurance companies–particularly what happens when a car accident claim exceeds insurance limits. Here is what to expect when:

• The at-fault driver’s policy limits exceed the damages sustained in a car crash
• The various legal options that can be taken to pursue maximum compensation
• How a skilled Southern California car accident lawyer can fight for the recovery you deserve

When car accident expenses exceed the at-fault driver’s insurance limits, other options can be explored. This article explains your choices and the steps you can take in such situations.

What To Do if Your Car Accident Claim Exceeds Policy Limits

When a car accident claim surpasses the at-fault driver’s insurance policy limits, the insurance company is only obligated to pay up to the maximum. If additional compensation is needed for medical care, repairs, or other damages exceeding the policy limits, other options must be pursued beyond the initial claim. This may include the following.

File an Uninsured Motorist/Underinsured Motorist (UM/UIM) Claim

If your car accident damages exceed the at-fault driver’s insurance limits, and you have uninsured motorist coverage/underinsured motorist coverage, California law (Veh. Code § 11580.2) allows you to file a claim with your own insurance company for the remaining costs.

Pursue a Personal Lawsuit

When damages from a car accident surpass the at-fault driver’s insurance policy limits, the injured party has the option to sue. This type of case can proceed to court, where a judge or jury will issue a verdict to resolve the matter. 

In California, a car accident lawsuit must be filed within two years from the date of the accident due to the state’s Statute of Limitations.

Other Alternatives to Consider

It is not uncommon for auto accident settlements to exceed the policy limits. When this happens, claimants may need to seek out other sources.

If you cannot settle with the at-fault driver’s insurance, the following options may also be available to cover damages.

• Medical Payments (MedPay): Pays immediate medical bills regardless of fault
• Umbrella Policies: Extend liability protection beyond auto policy limits
• Legal Counsel: Consult with a car accident lawyer to explore legal alternatives

Understanding Car Insurance in California

Car insurance offers essential financial protection for drivers involved in car accidents, with policies providing various coverage to address different potential damages and legal responsibilities. Typical insurance coverage often includes the following:

• Liability Coverage: Covers bodily injury and property damage costs of others when another party causes the accident
• Collision Coverage: Covers the repair of a vehicle if damaged in a collision, regardless of which party is at fault
• Comprehensive Coverage: Covers vehicle damage from non-collision events like theft, vandalism, or natural disasters

By understanding the different types of car insurance policies and their limits, drivers can make informed decisions about their policies and ensure they are adequately protected in the event of an auto accident.

What to Know About Insurance Policy Limits

Policy coverage will vary based on the limits the insurance provider sets and how much the client is willing to spend. In California, drivers are required to carry a minimum coverage of:

• $30,000 for injury/death to one person
• $60,000 for injury/death to more than one person
• $15,000 for damage to property

An insurance policy limit represents the maximum payout an insurance company will provide for a client’s claim. Policies typically include separate limits for property damage and bodily injury liability, which can vary significantly, ranging from thousands to millions of dollars.

Why Insurance Policy Limits Matter in California

The general purpose of policy limits is to protect individuals and their insurance companies from financial hardships. They ensure that the insurance company does not pay out more than it can afford to lose and that the policyholder is not liable for costs beyond the policy limits.

However, these limitations often work against injured victims following a serious car accident.

Affects Compensation for Car Accident Claims

Sometimes, victims are left responsible for the remaining financial expenses when the at-fault driver’s insurance does not fully cover the cost of car accident damages.

Damages from a car accident, such as medical bills, vehicle repairs, or lost wages, that exceed the at-fault driver’s insurance policy limits can be recovered through a lawsuit. However, this approach may not be the most effective if the at-fault party lacks sufficient assets to pursue.

When an at-fault driver’s insurance doesn’t fully cover car accident costs, those with uninsured/underinsured motorist coverage can utilize these benefits to cover the remaining expenses. However, because this is not required, many drivers do not have this coverage.

What Can Be Compensated in a Car Accident Lawsuit?

The injured party can sue the at-fault driver for two types of damages: economic damages and non-economic damages.

• Economic damages have a direct monetary value, such as medical bills, lost wages, and property damage.
• Non-economic damages are more subjective in nature and have no set dollar amount. It may include pain and suffering, emotional distress, and loss of enjoyment of life.

The amount of money the injured party can seek in a personal injury lawsuit depends on the facts surrounding the case. An experienced car accident lawyer can provide an estimate of what clients can expect to receive through a successful verdict.

How Legal Representation Will Help You Obtain a Fair Auto Accident Settlement

Regardless of the circumstances, a dedicated legal team specializing in car accident cases can provide comprehensive guidance throughout the claims process, ensuring a thorough understanding of all available options and the pursuit of the most advantageous legal strategy. Legal representation offers the following benefits.

• Thorough Case Assessment
  A lawyer examines all applicable policies, such as accident liability coverage, UM/UIM, or umbrella policies, to identify every potential source of financial recovery and recover the maximum compensation.
• Evidence Gathering and Case Valuation
  From obtaining police reports to working with medical and economic experts, experienced attorneys build a strong case, supported by the facts and proof of why damages are owed.
• Strategic Negotiation
  Car insurance companies frequently try to lower payouts for car accident claims. To counter this, seasoned car accident attorneys advocate for equitable settlements through demand letters, mediation, or structured agreements. This approach aims to achieve larger settlements while avoiding the prolonged timelines and costs associated with going to trial whenever feasible.
• Trial Representation if Necessary
  When the desired auto accident settlement exceeds what the insurance company is offering, a lawsuit may be necessary. In such cases, the car accident attorney will litigate the matter in court before a judge and jury to secure the full compensation their clients are entitled to.
• Statute of Limitations Compliance
  In California, the statute of limitations for filing a car accident claim against the responsible party is generally two years, but certain exceptions may apply. A car accident attorney ensures the claim is filed within the applicable timeframe to safeguard their right to seek maximum compensation.

Help from an Experienced Southern California Car Accident Lawyer

It’s not uncommon for car accident claims to exceed policy limits. To ensure you’re covered in an accident, it is important to understand your policy limits and other insurance options, as this will help you prepare if a car accident claim exceeds the other driver’s policy limits.

If you have been involved in a car accident, an experienced car accident lawyer from Attorney Jeff Car Accident Lawyer can help you file a claim and secure the maximum compensation for damages.

For questions, schedule a free consultation. After an accident, Jeff’s got you.