What Happens When the Car Accident Exceeds Policy Limits?

car accident exceeds policy limits

What Happens When the Auto Accident Claim Exceeds the Auto Insurance Policy Limit?

Most people are aware of the fact that those victimized in accidents and suffer injuries and/or damages resulting from another’s negligence are eligible for financial compensation. This financial compensation is meant to offset the victim’s losses simply because they were victimized by another party’s failure to provide due care, meaning negligence.

The legal boundaries and the insurance companies’ roles pertaining to the compensation owed to the victim are more obscure. However, those who are considering filing a personal injury claim against a supposedly negligent party must understand insurance companies will pay as little as possible and refuse to pay more than the policy limits. Let’s take a look at policy limit legalities and delve into how to maximize compensation even if it exceeds the defendant’s insurance limits.

The Impact of Policy Limits in the Context of Financial Compensation

When an individual purchases a life insurance policy, a policy limit caps the monetary payout in the context of a potential lawsuit stemming from an accident. As an example, if an individual obtains an insurance policy with a $60,000 limit, the insurance provider will pay upwards of this amount but not in excess of it in the event of personal injury litigation. If the accident victim endured subsequent damages that amount to $100,000, $60,000 can be obtained from the insurance provider. However, the remaining $40,000 might be available through a personal injury lawsuit.

The example detailed above is precisely why accident victims need the expertise of a proven personal injury attorney. In some cases, merely retaining the services of an attorney has the potential to convince the insurance provider or individual who caused the accident to consider providing additional payment.

Legal Options for Obtaining Excess Damages

There are several different ways accident victims can pursue the compensation they are rightfully owed in the event that the total amount of the compensation extends beyond the defendant’s insurance policy limits. As an example, a personal injury lawsuit can be filed against multiple defendants. There is also the opportunity to personally collect the expected financial compensation directly from the defendant. In fact, it might even be possible to recover the compensation through an umbrella insurance policy.

If you decide to pursue justice by filing a personal injury lawsuit against several defendants, the overarching aim is to prove those defendants were jointly liable for the full extent of the damages. It is quite possible both defendants acted negligently and they have two distinct insurance policies that can satisfy the quest for justice in the form of significant financial compensation.

What About the Umbrella Policy Route for Justice?

It is possible to collect a considerable amount of money under an umbrella policy. In some cases, defendants have several insurance policies that cover them. Such an umbrella policy is typically in play when the supposedly negligent party is a corporation or a large business. Such organizations commonly have additional insurance coverage yet there are also some individuals with umbrella coverage.

A Closer Look at Insurance Bad Faith

California law mandates insurance providers settle injury claims that fall within the boundaries of policy limits. If the insurance company refuses to settle such claims, they might be held liable for the entirety of the damages. Insurance bad faith really does have the potential to render insurance providers more liable for more additional compensation beyond the policy limit. As an example, failing to make timely payments, refusing to investigate accidents in an appropriate and in a timely manner and failing to provide an explanation for denying claims constitute bad faith on behalf of the insurance provider.

A Personal Lawsuit

There is also the potential for the victim to personally sue the defendant. However, the party supposedly at fault for the accident might not have sufficient assets necessary to pay the full amount sought. When in doubt, lean on your attorney to help you choose the best avenue for justice.

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