Auto insurance helps individuals and society absorb the costs of the thousands of accidents that occur each year. Without it, individuals would be unable to cover the costs of extensive losses associated with property damage, injury, or death due to auto accidents. However, insurance policies have limits. And although some drivers carry policies with high coverage amounts, most motorists do not. In fact, many of them carry the basic coverage required by law. So what happens when auto accident claims exceed a driver’s policy limits? The answer is that it depends on the situation.
Required Policy Limits For Auto Accident Claims
Most states require motorists to carry some sort of accident insurance to help offset the costs of auto accident claims. Depending on your state, at-fault or no-fault insurance rules may govern coverage.
States that follow at-fault insurance rules for auto accident claims require drivers to purchase insurance to cover the losses from accidents they caused. Injured motorists in these states must make claims against the at-fault driver’s insurance company for compensation.
Generally speaking, the mandated coverage in most at-fault states includes at least $25,000 in bodily injury protection per person, with up to $50,000 of bodily injury protection per accident and about $15,000 to $25,000 in property damage per accident.
In no-fault insurance states, motorists’ insurance policies cover their own injuries and property damage. The required coverage amounts are similar to those found in no-fault states. Additionally, a few states with no-fault insurance rules give motorists the choice of being under at-fault or no-fault rules for auto accident claims.
Other Types of Insurance
The levels set by each state are often sufficient to settle many car accident cases, but not always. Sometimes, the cost to repair damage caused by car accidents far exceeds motorists’ coverage.
When this occurs, the injured party may have quite a few sources of compensation available to them outside of the mandatory automobile insurance.
Supplemental Liability Insurance Coverage
Supplemental liability insurance coverage refers to auto accident insurance coverage that exceeds the state-mandated policy amounts. For example, a motorist in a state requiring $25,000 of injury coverage per person may purchase $50,000 or $100,000 of coverage instead.
Many financial and legal experts consider purchasing higher amounts of coverage to be a sound idea. Doing so provides great protection of an at-fault driver’s assets. However, not all motorists can afford coverage beyond the state minimum and do not purchase it.
Underinsured/Uninsured Motorist Insurance Coverage
What happens if a hit-and-run driver or a driver without insurance injures you in an accident? If you have underinsured/uninsured motorist coverage, you can file an auto accident claims with your insurance company. Unfortunately, not many motorists carry this type of coverage due to its added costs.
Umbrella Insurance Policy Coverage
An umbrella insurance policy is a type of coverage that kicks in after your other forms of insurance have been exhausted. For example, if you cause an accident that produces damages that exceed your auto policy by $50,000, you can tap your umbrella policy to cover the $50,000.
What Happens When Auto Accident Claims Exceed Policy Limits?
When the damages from an accident exceed auto insurance policy limits, you may still have options for compensation available. It all depends on the circumstances of your accident, the state you are in, and the other drivers’ state of insurance and financial affairs.
For example, in no-fault insurance states, your personal injury protection (PIP) insurance will cover your damages up to a certain point. After that, you could claim compensation against the other driver’s insurance company if they have coverage.
In no-fault and at-fault states, you can also file a claim with your underinsured/uninsured insurer if you have that coverage, or you could file a claim against the other driver’s umbrella policy if they have one.
When all forms of insurance have been investigated and exhausted, you can still hold the at-fault driver personally liable for the damage they have caused. This option will require you to file a lawsuit against the driver for the losses insurance did not cover.
Although directly suing a driver is theoretically sound, it may be a difficult solution in practice. If the at-fault driver is of low resources, it may be quite challenging to get any money out of them if you win a judgment.
Your attorney could pursue the driver’s assets or seek to garnish their wages. However, if they don’t have any assets or are unemployed, then suing them might be an exercise in futility.
Typical Car Accident Damages: Auto Accident Claims
Car accident victims can face an array of devastating losses. As you would imagine, the more serious the accident, the more compensation may be available to victims. However, some minor accidents can also lead to the award of substantial damages.
Common losses from car accidents for which compensation may be available include:
- Medical treatment costs
- Lost income and economic opportunity
- Pain and suffering
- Mental anguish
- Loss of enjoyment of life
- Burial and funeral expenses in cases of fatalities
Keep in mind that in some no-fault insurance states, injury victims can only auto accident claims a portion of their damages from their PIP insurance companies. The rest must come from other sources. You can rest assured that your accident attorney will diligently pursue fair compensation for your losses on your behalf.
If you or someone you love has experienced significant harm in a car accident, contact The Joel Bieber Firm. We can fight for the compensation you deserve, even if the other driver’s automobile policy does not completely cover your losses. Call today for a free consultation with an accident attorney who cares.