How Often Do Auto Accident Settlements Exceed the Policy Limits?

Typical Policy Limits in Utah

In most cases, drivers only carry the minimum amount of insurance required by law. If you were involved in a serious auto accident, your expenses and intangible losses might quickly exceed your policy limits.

Although car accident settlements rarely exceed the policy limits, there are some circumstances where this happens. You may have an auto accident claim or a personal injury lawsuit in which the policy limits seem too low to cover your loss. You may wonder whether you can expect a settlement offer exceeding the policy limits.

It is important to note that this is rare. There are a few ways to collect injury compensation. The following are some of the circumstances in which this may occur:

• Umbrella policy

• Multiple defendants

• Personal judgment against the defendant

• The bad faith claims process

• Underinsured motorist policy claims

• Willing payout by the other driver

America’s Accident Attorneys can assist you in evaluating your claim if you fear that settlements will exceed the policy limits. Consider establishing an attorney-client relationship with us today.

Auto Liability Insurance and PIP

Utah law mandates that every car insurance policy in Utah includes personal injury protection (PIP). Irrespective of who was at fault, your insurance must pay for your PIP expenses.

 As part of its “no-fault” coverage, PIP typically provides a minimum limit of $3 000 for injury costs resulting from car accidents. As part of the coverage, drivers and passengers will be covered for expenses related to doctor’s visits, hospital care, massage therapy, acupuncture, and chiropractic treatment. PIP also covers lost wages when you cannot work after an accident.

Liability insurance will cover financial compensation for personal injury, death, and property damage from the negligent driver to the victim. In cases where you were injured in an auto accident caused by a negligent driver, the negligent driver’s insurance should compensate you for losses not covered by PIP. This includes intangible losses such as pain and suffering.

Umbrella Policy Limits

Under an umbrella policy, you can be covered if a car accident claim exceeds your auto policy’s coverage. Compared to other types of insurance, umbrella insurance is inexpensive. Umbrella policies are drawn only when other policies have already paid their maximums.

Individuals should always check if they have an umbrella policy, although it is more likely for corporate businesses to have one. You may be able to claim from the umbrella insurance company if the other driver’s auto insurance policy cannot cover the settlement amount.

Personal Judgment Against the Defendant

The defendant is ultimately responsible for paying your settlement amount. The fact that they have insurance will allow them to settle part of your claim. However, if the claim exceeds the at-fault driver’s insurance policy limits, the defendant remains responsible for covering the balance.

A claim against a defendant with no assets or money is not worth pursuing if the defendant can’t pay. However, putting a lien over property or garnishing wages may work.

The Bad Faith Claims Process

Insurance companies are obliged to always act in good faith with their clients. Where they fail to do this, they are found to be in “bad faith.” A company that refuses to pay your claim, or fails to protect you and defend you against another’s claim, is acting in bad faith.

It is possible for the defendant to assign their bad faith cause of action to the plaintiff. The plaintiff will then agree not to pursue collection against the at-fault driver.

If a jury finds that an insurance company has acted in bad faith and refuses to offer a fair settlement within its policy limits, it may award more than the policy limits. To establish a bad faith claim, you must show an insurer withheld benefits or delayed in an unreasonable manner or without proper cause.

Underinsured Motorist Policy Claims

You can take out an underinsured motorist policy which provides coverage to compensate you for bodily injury claims exceeding the liability insurance coverage limits of the at-fault driver. If you had the foresight to take out one of these policies, this policy would compensate you for the insurance limits shortfall. It is prudent to carry underinsured motorist coverage.

Willing Payout by the Other Driver

Although rare, sometimes, the negligent driver will willingly offer to pay out the excess due to a moral obligation or a feeling of guilt for causing bodily injury associated with the accident. This is only possible when the at-fault driver has sufficient personal assets to cover the amount which exceeds policy limits.

Typical Injuries That Exceed the Policy Limits

Typically, injuries that exceed the policy limits include serious injuries with high medical costs and long-term medical expenses. Such injuries include:

• Catastrophic injuries

• Injuries to the brain (traumatic brain injuries)

• Cervical spinal injuries

• Spinal cord injuries

• Loss of an arm or leg

• Severe burns

• Paralysis

• Accidents involving large trucks or motorcycles

Medical bills from auto accidents that require ongoing or lifelong treatment can add up over time and substantially increase the settlement amount. Depending on the severity of your injury, your auto insurance policy may not cover expenses such as lengthy hospitalization, surgery, inpatient rehabilitation, and nursing care at home. The amount taken for pain and suffering and the loss of wages a person may lose in the future can be significant.

How to Receive the Maximum Car Accident Settlement

To determine whether your insurance coverage may cover the costs of your potential auto accident claim, seek the advice of a personal injury attorney who is experienced in handling auto accidents.

An experienced attorney can help. Our team will be able to help you determine the insurance coverage you require if your auto accident settlement exceeds your policy limits. Call Our Firm today for a free consultation to assess your insurance claim.