What Happens When a Car Accident Claim Exceeds Insurance Limits

When a car accident claim exceeds insurance limits, the insurance company only pays up to the coverage amount specified in the policy. Unfortunately, you could be left with unpaid expenses if your damages exceed the limit. In such circumstances, victims may pursue other options to receive full compensation.

There are several ways to mitigate the compensation gap. One possibility is filing a personal lawsuit against the offending driver, which may yield more damages if the driver has adequate wealth. However, this might not always be practical if the driver does not have the means to afford damages exceeding insurance coverage.

Another option is underinsured motorist (UIM) coverage, a provision in your insurance policy that provides supplemental compensation when the at-fault driver’s coverage is insufficient. This coverage can help cover medical expenses, lost wages, and other damages that exceed the at-fault driver’s policy limits. It is particularly beneficial in cases where the liable party lacks sufficient personal assets to compensate the injured party.

In some instances, it may also be possible to seek compensation from third parties who contributed to the accident, such as vehicle manufacturers in cases of mechanical failure or municipalities responsible for road maintenance. Assessing all potential sources of compensation ensures that victims receive the financial relief they need to recover fully.

Insurance Companies Only Pay Up to the Limit

Understanding insurance policy limits is one of the most important aspects of any car accident case. Every auto insurance policy has a maximum payout amount, known as the policy limit. Once this limit is reached, the insurance company is not obligated to pay additional damages.

What Are Policy Limits?

Policy limits refer to the maximum amount an insurance company will pay for a covered claim. In New York, the minimum liability insurance requirements are:

• $25,000 per person for bodily injury
• $50,000 per accident for bodily injury involving multiple people
• $10,000 for property damage

If the damages from your accident surpass the insurance policy limits, the insurance company will only cover up to the maximum amount specified. But what happens when a car accident claim exceeds insurance limits? In such cases, you’ll need to pursue the remaining compensation from other sources, which may include the at-fault driver personally or alternative coverage options.

Real-World Scenario

Imagine you were injured in a car accident, and your medical expenses totaled $60,000. If the at-fault driver has only $25,000 in bodily injury coverage, the insurance company will only pay up to that amount. The remaining $35,000 must be covered through other means.

What Happens When a Claim Exceeds the Insurance Limits?

The injured party may face significant financial hardships when the cost of injuries and damages surpasses the at-fault driver’s insurance coverage. With the insurance company only covering up to the policy limits, medical bills, rehabilitation costs, lost wages, and other expenses often remain unpaid. As a result, victims may be left exploring alternative sources of compensation.

Depending on the circumstances, different outcomes can unfold, including seeking additional insurance benefits, pursuing legal claims against responsible parties, or facing potential financial strain if no further compensation is available.

Filing a Lawsuit Against the At-Fault Driver

Bringing a lawsuit against the at-fault driver is a standard method of pursuing additional compensation. This approach is best suited for cases where the at-fault driver has significant assets that could be used to cover your damages.

Utilizing Your Insurance Coverage

Depending on your policy, your insurance may provide additional coverage, such as:

• Underinsured Motorist Coverage (UIM): If the at-fault driver’s insurance is insufficient, your UIM coverage can help pay for the remaining damages up to your policy limits.
• Personal Injury Protection (PIP): New York requires PIP coverage, which may assist with medical expenses and lost wages, regardless of fault.

Checking for an Umbrella Policy

The National Association of Insurance Commissioners (NAIC) explains that umbrella policies provide an additional layer of liability protection beyond the limits of standard insurance, such as auto or homeowners coverage. These policies are designed to shield individuals from substantial financial losses when they are held liable for damages or injuries exceeding their primary insurance coverage limits.

For example, if an at-fault driver has an umbrella policy, it can cover costs like damages, medical expenses, or legal fees that go beyond the limits of their regular auto insurance. In high-cost scenarios, umbrella policies offer invaluable peace of mind and financial security.

Can My Settlement Be Delayed If the Claim Exceeds the Limits?

Yes, when a claim surpasses insurance limits, settlement negotiations often become more complicated and prolonged. Insurance companies may attempt to limit their financial exposure by disputing liability, delaying the payment process, or offering settlements that do not fully cover the victim’s damages. These delays can arise from multiple insurers determining responsibility, prolonged legal proceedings, or complex negotiations regarding policy exclusions and coverage disputes.

Factors Affecting Recovery

Several factors influence your ability to recover damages beyond insurance limits, including:

• The at-fault driver’s assets: Additional compensation may be complex without financial resources.
• Your insurance coverage: Having UIM or PIP coverage can provide additional protection, ensuring that critical expenses such as medical bills, rehabilitation costs, and lost wages are covered.
• Legal representation: An experienced attorney can identify all available compensation sources, analyze the specifics of your case, and negotiate effectively on your behalf to maximize recovery.

Consult an Experienced Car Accident Attorney Today

Securing full compensation in such cases can become a challenging process. The Barnes Firm has a proven track record of helping victims obtain the compensation they deserve, even in cases where insurance coverage falls short. Our New York car accident attorneys meticulously evaluate every possible avenue to maximize recovery for our clients

We specialize in:

• Identifying all potential compensation sources
• Handling negotiations with insurance companies
• Pursuing legal action when necessary to recover excess damages

Don’t settle for less than you deserve. Contact The Barnes Firm today for a free consultation at (800) 800-0000.

Richard Barnes – President of The Barnes Firm

Richard Barnes: “As President of The Barnes Firm, I have dedicated my career to achieving justice in hundreds of cases for the victims of injuries caused through the fault of others. Additionally, I have been honored to have been elected Best Lawyer and a Super Lawyer”

Years of Experience: 30+ years
LinkedIn Profile: Richard Barnes