How Often Do Auto Accident Settlements Exceed the Policy Limits?

suing beyond policy limits

Policy limits dictate how much an insurance company will pay for an accident.

Unfortunately, collecting injury compensation beyond the insurance policy limits is unusual.

However, every situation is unique. We highly recommend discussing your case with an experienced auto accident attorney.

Our personal injury lawyers can help you understand how policy limits affect your claim and consult on other aspects of your case.

How Insurance Policy Limits Work

Most auto insurance policies include at least two types of insurance:

  • Bodily injury coverage and
  • Property damage coverage.

Bodily injury coverage has two limits. 

The first limit, limits what the insurance company will pay for a single individual’s injuries. The second limit, limits what it will pay for all injuries sustained in a single accident.

For example, 50/100 coverage limits bodily injury compensation to $50,000 per person and $100,000 per accident.

Auto insurance policies contain a separate limit for property damage. Because the limits for bodily injury and property damage are separate, you can’t exceed the limits for either one, even if you stay within the total limit.

For example, imagine you sustain $10,000 in bodily injury and $30,000 in damage to your vehicle in a car accident. The other driver has 50/100 bodily injury coverage and a $25,000 property damage limit.

You should be paid the full $10,000 in bodily injury because it is below the $50,000 bodily injury policy limit per person.

However, the insurance company won’t pay the additional $5,000 in property damage because it is above the $25,000 property damage limit, even though your total damage ($10,000 bodily injury and $30,000 property damage) is below the total policy limits of $100,000. The $100,000 is for bodily injury coverage.

Can You Collect Additional Damages?

Although auto accident settlements do not often exceed the policy limits, suing beyond policy limits is possible. However, you will likely have to look to other sources to obtain more compensation. 

Here are a few ways to collect extra damages if your claim exceeds your policy limits.

Umbrella Policy

If the defendant has an umbrella policy, you may be able to collect extra damages from that policy. Umbrella policies kick in after other policies have paid out their maximums.

Corporate defendants, such as trucking companies, are more likely to have umbrella policies than individuals. However, it is important to discover what kind of coverage the defendant has. That way, you can draw from as many resources as possible to ensure you are compensated fairly.

Multiple Defendants

If more than one person can be held responsible for the accident, you may be able to recover under multiple insurance policies. For example, if you were hit by a delivery truck, both the driver and the trucking company may be liable.

If each has a $50,000 bodily injury policy limit, you could potentially recover up to $100,000 between the two insurance companies if your injuries demand such a payout.

Personal Judgment Against the Defendant

Remember, the person who is ultimately responsible for the accident is the defendant. The insurance company pays damages only because they have a contract with the defendant to do so.

If your damages are greater than the defendant’s insurance policy limits, you may be entitled to a judgment for more than the policy limits. You could potentially recover the remaining judgment by garnishing the defendant’s wages or putting a lien on their property.

Bad Faith

An insurance company may act in bad faith if it denies a claim even though it knows that the claim should be approved. If the insurance company refuses to enter into a reasonable settlement that is less than the policy limits, a jury could award damages greater than the limits.

In that case, the insurance company may be required to pay the whole judgment.

So How Much Can Someone Sue For a Car Accident?

Someone can usually sue for up to the policy limits of the at-fault driver’s car insurance coverage. 

As we’ve also learned, you can collect additional compensation in certain circumstances via umbrella policies, multiple defendants, personal judgments, and bad faith claims.

Unfortunately, sometimes medical bills will still exceed these limits.

For this reason it’s important that you also carry underinsured motorist coverage.

This means that if you are maxed out on what you can get to cover your damages from the at-fault driver’s insurance, you can also make a claim against your underinsured motorist coverage to supplement the compensation you receive and to make sure your bills are covered.

When You Should Contact a Lawyer

If you have suffered injuries in an accident, you should always contact a lawyer. An experienced personal injury attorney can determine if you have a case. If you do have a case, they help you negotiate with insurance companies so you can get the maximum possible compensation.

At VanDerGinst Law, we specialize in personal injury cases. In fact, we have represented ten of thousands of injury victims in Iowa and Illinois and obtained millions of dollars in settlements. Call us at 800-797-5391 for a free consultation, or send us a message online.

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The information contained on this website is presented by VanDerGinst Law P.C. It is not intended nor should it be construed as professional legal advice. The information is general in nature about the Firm, the scope of services we offer, and our community outreach, it is not legal advice. Please contact us by phone, email, mail, or via this website for inquiries. Contacting us does not create an attorney-client relationship. Please contact a personal injury attorney for a consultation regarding your situation. This website is not intended to solicit clients outside the State of Iowa and/or the State of Illinois.