Insurance policy limits in a car accident claim set the maximum amount an insurance company will pay under the auto insurance policy for things like bodily injury and property damage. While these liability limits often define the ceiling of a car accident settlement, some exceptions enable accident victims to seek compensation beyond the stated cap.
You can sometimes recover more than the policy limits settlement, but it depends on the situation. Situations such as the insurer’s bad faith, an umbrella policy, or additional liable parties could potentially lead to the highest possible compensation.
At Hillguard Injury Lawyers, our car accident lawyers have years of experience helping injured victims recover the full extent of their medical bills, lost wages, and other economic damages, including pain and suffering. We know how to hold an insurance carrier accountable and fight for a fair settlement when damages exceed the defendant’s insurance policy. If you have sustained injuries in a car accident, contact us today for a free consultation.
This post will cover what insurance policy limits mean, how insurance companies calculate settlement offers, and the strategies that can help you secure fair compensation in your personal injury case.
What Do Policy Limits Mean in a Car Accident?
When you’re involved in a car crash, one of the first things that comes up in a personal injury case is insurance policy limits. These limits represent the maximum amount an insurance company will pay under the auto insurance policy for damages like medical expenses, lost wages, pain and suffering, and property damage.
Most policies include bodily injury liability and property damage liability coverage. Bodily injury pays for things like medical treatment, hospital stays, physical therapy, and non-economic damages such as emotional distress if you’ve been injured by the at-fault driver. Property damage coverage helps repair or replace vehicles or other items damaged in an auto accident.
Therefore, when you file a policy limit demand, you are asking the insurance carrier to pay up to the maximum amount of the defendant’s insurance policy. However, matters can quickly become complicated if your damages exceed the policy limits.
It may seem unfair, but policy limits are designed to protect insurance companies. Without them, a single catastrophic accident could bankrupt a carrier. By setting minimum liability coverage requirements, states ensure that drivers carry at least some protection, but it’s rarely enough to cover the full extent of severe injuries, medical bills, and accident settlements.
Many drivers only carry minimum liability coverage, which means that if they cause a wreck, the injured victim may be left with a remaining balance that far exceeds what the insurance company will pay. Unfortunately, that’s why some accident victims find themselves turning to their own underinsured motorist coverage or even uninsured motorist coverage when the at-fault party has little or no insurance.
Policy limits vary from state to state in the U.S. Some states require just $25,000 per person in bodily injury coverage and $50,000 per accident, along with $10,000 for property damage. Others mandate higher limits. Still, most drivers adhere to the minimum requirements.
The difference between the minimum and higher limits makes a significant difference for accident victims. If you suffer catastrophic injuries or require ongoing medical treatment and physical therapy, the settlement amount you receive under a policy with higher liability limits could come much closer to fair compensation. On the other hand, when the settlement exceeds the policy limits, you’ll need to explore additional options to seek compensation.
How Do Insurance Companies Determine Settlement Offers?
An insurance company doesn’t arbitrarily determine numbers when evaluating a car accident settlement. Adjusters go through the entire process step by step, weighing the economic damages like medical costs and lost wages. They also consider non-economic damages such as pain and suffering or emotional distress.
They rely on evidence like accident scene photos, witness statements, and medical records to estimate the value of your personal injury case. Expert opinions, including accident reconstruction reports, may also come into play. Despite all this, the insurance carrier consistently monitors the limits of the insurance policy. That limit is their ceiling, and they’re trained to minimize payouts whenever possible.
In states that follow comparative negligence rules, the settlement amount may be reduced if the injured party shares some fault. Don’t forget that insurance adjusters often start with lowball offers. They know that many accident victims feel overwhelmed by medical expenses and desperate for quick relief, so they use early negotiations as a way to pay less than the fair settlement value. This is where an experienced attorney can make a world of difference.
Can You Get More Than Policy Limits in a Car Accident Settlement?
Yes, it’s legally possible in certain situations. While many people believe limits are a restrictive cap, the reality is that car accident lawsuits sometimes lead to additional compensation when damages exceed the defendant’s insurance policy.
For example, if the insurance company acts in bad faith – by unreasonably denying a valid claim or refusing a reasonable policy limit demand – they may be forced to pay beyond the maximum amount listed in the auto insurance policy. In addition, personal injury attorneys often uncover other sources of coverage, such as an umbrella policy, or pursue the at-fault driver directly if they have valuable assets. That’s why working with an experienced attorney who knows how to hold insurers accountable can make such a significant difference in a personal injury case.
How to Get More Than Policy Limits in a Car Accident Settlement
If you’ve suffered serious injuries and your settlement exceeds the insurance policy limits, don’t panic. There are several strategies to seek compensation beyond the initial cap.
Suing the At-Fault Driver Personally
One option is filing a lawsuit directly against the at-fault driver. If they own property, investments, or other assets, you may be able to collect from them personally. However, if the driver doesn’t have much to their name, pursuing them may not cover the full extent of your medical costs and non-economic damages. This is why it’s important to weigh the risks before committing to pursuing the at-fault driver personally.
Pursuing an Umbrella or Excess Insurance Policy
Some drivers or companies carry an umbrella policy that kicks in after the auto insurance policy has been maxed out. Umbrella coverage can provide additional compensation when the settlement amount goes beyond standard liability limits. Discovering this type of policy can make a significant difference in covering excess damages.
Proving Bad Faith by the Insurance Company
As we mentioned earlier, if an insurance company handles a claim unfairly, you may be able to prove bad faith. When successful, this approach can compel the insurer to pay an amount exceeding the settlement limits of the policy. For example, in some car accident lawsuits, injured victims have won substantial verdicts because the insurance carrier refused to negotiate in good faith.
Seeking Compensation from Additional Liable Parties
Sometimes the at-fault party isn’t the only one responsible. If the driver was working for an employer at the time of the crash, or if a defective car part played a role, you may be able to pursue claims against multiple defendants. In cases of joint liability, each defendant’s insurance can contribute to the fair compensation you deserve.
Using Underinsured Motorist Coverage (UIM)
If you’ve purchased underinsured motorist coverage under your auto insurance policy, you can file a claim when the other driver’s liability coverage is insufficient. Rules vary by state, but in many cases, UIM helps cover the remaining balance of your medical treatment, lost wages, and non-economic damages. Likewise, uninsured motorist coverage can step in when the at-fault driver has no insurance at all.
Hiring a Car Accident Lawyer
This is where an experienced attorney proves to be invaluable. A skilled car accident lawyer knows how to investigate every possible source of compensation, whether that’s finding an umbrella policy, pursuing bad faith, or holding additional defendants accountable. They handle negotiations, build strong cases with medical records and witness statements, and represent you in court if necessary.
Most personal injury attorneys work on a contingency basis, meaning you do not pay unless they recover money for you. Many also offer a free case review or free consultation, so there’s no risk in speaking with one. For an injured victim, that support can make all the difference in reaching a fair settlement and securing the maximum compensation.
What Kind of Evidence Can Boost Your Car Accident Payout?
At the end of the day, strong evidence transforms a claim into a winning case. Detailed medical records and expert testimony can prove the severity of serious injuries or catastrophic injuries. Documentation of lost wages and future earning potential shows the true cost of economic damages. Furthermore, reports from accident reconstruction specialists can clarify what happened at the accident scene and solidify fault.
The more you can gather evidence, from medical bills to witness statements, the stronger your leverage becomes. That evidence not only proves your losses but also helps your personal injury attorney fight for the fair compensation you’re entitled to in your car accident settlement.
Ready to Maximize Your Car Accident Settlement?
Policy limits may set the maximum an insurance company will pay under an auto insurance policy, but there are strategies to go beyond them. From proving bad faith to uncovering an umbrella policy or pursuing additional liable parties, injured victims have options to recover the full extent of their damages.
Exceeding insurance policy limits isn’t guaranteed, but it is possible in certain circumstances. With the right approach and strong legal support, you can fight for fair compensation even when your damages exceed the defendant’s insurance policy.
At Hillguard Injury Lawyers, we’ve helped countless accident victims navigate the entire process and secure maximum compensation for their medical bills, lost wages, pain and suffering, and more. Our legal team has the experience, resources, and determination to take on any insurance carrier that tries to minimize payouts. Contact us today for a free consultation.
FAQs
Car accident settlements can feel overwhelming, especially when insurance policy limits come into play. Based on our experience helping clients at Hillguard, we’ve put together answers to the most common questions so you can better understand your options and rights.
What is the Average Settlement Amount for a Car Accident?
The average varies widely, but many car accident settlements range from a few thousand dollars to amounts exceeding six figures, depending on the severity of injuries, medical bills, and insurance coverage.
Are There Legal Options if the Settlement Amount is Below Policy Limits?
Yes, you may still pursue additional compensation through umbrella policies, third-party liability, or by proving insurer bad faith.
What Is the Typical Timeframe to Reach a Settlement After a Car Accident?
Most cases settle within a few months to a year, but more complex claims can take longer if litigation is involved.
How Can You Get the Maximum Settlement From a Car Accident?
Document your damages carefully, seek immediate medical treatment, and work with an experienced attorney who knows how to negotiate aggressively with insurers and win your personal injury claim.
How Do Policy Limits Influence the Settlement?
Policy limits cap the amount an insurance company will pay under a policy, but they don’t always reflect the full extent of your damages.
What is the Maximum Amount an Insurance Company Will Pay per Accident?
This depends on the at-fault driver’s policy. Most auto insurance policies have separate per-person and per-accident limits that define the maximum payout.
What Are the Consequences if My Damages Exceed the At-Fault Driver’s Policy Limits?
You can explore other sources of recovery, such as suing the driver personally, tapping into your own underinsured motorist coverage, or pursuing claims against additional responsible parties.
