What Happens When a Car Accident Exceeds Insurance Limits?
The streets and highways of the United States can be hazardous for motorists, and thousands of traffic accidents in the United States involve fatalities and serious bodily injuries each year. Car accidents can result in life-changing injuries for some victims, who might require ongoing medical care for years or the rest of their lives. As medical treatment costs continue to increase, it becomes more likely that the damages suffered by an accident victim will exceed the limits of the relevant insurance policy. Then, they often have to ask themselves what to do next to seek financial compensation for their injuries.
The good news is you never have to identify your options alone. While you’re dealing with serious injuries, the last thing you need is additional stress from trying to decipher the legal process. Instead, you can hire an Austin car accident attorney who can determine all possible avenues for compensation, even when your losses exceed the liable driver’s insurance policy.
Policy Limits for Auto Liability Insurance Coverage in the United States
United States law mandates that drivers acquire auto liability insurance. The least amount of auto insurance required is $25,000 in property damage, $60,000 for injury protection per accident, and $30,000 for injury compensation per injured individual.
Most residents have auto liability insurance coverage. The following are some other types of vehicle insurance available to drivers in the United States:
- Collision coverage – provides payment for the repair of your car after you suffer injuries during an accident.
- Comprehensive auto liability coverage – provides payment for repairs if a vehicle suffers damage in other dangerous events such as thefts or fires.
- Uninsured/underinsured motorist insurance – compensates you if an uninsured driver causes an accident.
- Personal injury protection insurance – provides payment for medical bills, lost earnings, and other expenses no matter who is at fault for causing the accident.
- Additional liability insurance – ensures that a driver does not have to pay for anything out-of-pocket in case of severe damages.
The policy limits for your claim will depend on the type of coverage the liable parties have, and your car accident attorney can assess what coverage is available to you.
The Most Common Injuries Accident Victims Suffer During Car Accidents
Accident victims suffer many types of injuries during traffic collisions. Some of the most common types of injuries sustained by accident victims are as follows:
- Spinal cord injuries
- Traumatic brain injuries
- Bone fractures
Car Accident Injuries Can Affect Every Area of Your Life
The damages associated with a single auto accident may exceed the policy limit of an applicable insurance policy. This is common when a victim suffers catastrophic injuries with lifelong disabilities. The costs of medical treatment for severe injuries can skyrocket quickly.
For example, you may have psychological distress for which you are seeing a therapist or a psychologist. You may have to undergo multiple surgeries to address your injuries and allow you to recover your health, and the medication costs can be expensive.
You will also have to deal with the lost income you may suffer if you lose your job or cannot work in your chosen field after the accident. You may never return to your chosen profession again, either relying on disability benefits or finding a lower-paying, less fulfilling job you can perform with your injuries.
The above are only financial losses from your injuries. A substantial portion of car accident compensation often covers intangible losses, such as pain and suffering. If you have permanent injuries that completely alter your future, your emotional and physical pain and suffering will likely be significant and worth a lot of money in an accident claim.
All of these costs and losses can quickly exceed insurance policy limits. This is when the insurance process can get even more complex, and you need a highly experienced car accident attorney handling your claim.
What to Do When the Auto Accident Damages Are Greater than Insurance Policy Limits?
You can claim different damages if you suffer injuries during a car accident in the United States. For example, you may claim lost earnings, medical expenses, property damages, and pain and suffering. The total damages amount can be greater than the policy limits associated with a single insurance policy.
Your car accident lawyer will analyze the driver’s insurance coverage to ascertain if other insurance policies may cover the costs associated with your case. They will also examine your own insurance policy and determine if it includes personal injury protection or underinsured motorist coverage.
After a car crash and injuries, you can hold the other driver who caused the accident personally liable and file a lawsuit against them to seek financial compensation for your injuries. Although rare, you might also sue insurance companies directly if you prove they are acting in bad faith.
A more common option is to hold a third party liable for your injuries. For example, if the negligent driver was operating a company vehicle for work, you can often seek financial compensation for your injuries from their employer under the legal doctrine of respondeat superior.
Identifying all possible parties that might share liability maximizes your opportunity for full compensation. Your car accident lawyer will determine all potentially liable parties in their investigation of the crash.
The Stowers Doctrine
The Stowers Doctrine is a legal principle that all injured accident victims should understand. It refers to a doctrine that holds insurance companies accountable for acting in good faith when dealing with settlement offers made within policy limits. Your car accident lawyer can explain the principles of this doctrine.
In simple terms, the Stowers Doctrine states that if an injured accident victim makes a settlement offer to an insurance company within the policy limits and the offer is reasonable, the insurance company must seriously consider accepting it. If the insurance company refuses the offer and the injured accident victim later wins a higher amount in court, the insurance company may be responsible for the excess amount.
This doctrine is crucial for injured accident victims because it gives them leverage when negotiating with an insurance company. It encourages insurance companies to act in good faith and incentivizes them to settle within policy limits to avoid potential liability.
If an insurance company fails to act in good faith and unreasonably refuses a settlement offer that falls within policy limits, it may face potential legal consequences. The Stowers Doctrine helps level the playing field for injured accident victims, allowing them to hold insurance companies accountable for their actions.
Note that the Stowers Doctrine varies from state to state, as it is a legal principle established through case law. Some states have adopted similar doctrines, while others may have different rules or guidelines.
In summary, the Stowers Doctrine is a legal principle that holds insurance companies accountable for acting in good faith when dealing with settlement offers made within policy limits. It gives injured accident victims leverage in negotiating with insurance companies and provides a means to hold them responsible if they unreasonably refuse a settlement offer. Understanding the Stowers Doctrine can be key for injured accident victims seeking fair compensation for their injuries.
A Car Accident Lawyer Can Help You Understand Relevant Insurance Policies
Some other insurance policies might be relevant to your case, and having an attorney on your side can help you understand the provisions of each type of coverage. Insurance companies draft policies according to specific principles, often that benefit them over policyholders. However, experienced car accident attorneys know how to hold insurers accountable when appropriate.
For example, one insurance company agreement may require all parties to participate in arbitration to resolve potential disputes. Other insurance company policies may require the parties to focus on other forms of alternative dispute resolution regarding the plaintiff’s claims.
Your attorney can review all policy language and determine what you must do to seek compensation from available insurance policies.
Underinsured Motorist Insurance Policies
Underinsured motorist coverage is a type of insurance you can add to your own policy, providing an extra layer of protection in case you’re in an accident with a driver with insufficient insurance. This coverage can be a lifeline for accident victims who find themselves facing medical bills, vehicle repairs, and other expenses that exceed the policy limits of the at-fault driver.
So, how does an underinsured motorist claim work? If you suffered an injury in a car accident and the at-fault driver’s insurance isn’t enough to cover your expenses, you may file a claim with your own insurance company under your underinsured motorist coverage. This coverage can help when your losses exceed another driver’s policy limits, ensuring you receive the compensation you deserve.
Even though you’re filing a claim with your own insurance company, you still want a car accident lawyer handling your underinsured motorist claim. An experienced attorney will navigate the complexities of the claims process on your behalf, ensuring your rights are protected and you receive the maximum compensation available.
Underinsured motorist coverage is a crucial safety net for car accident victims. It provides additional protection when the at-fault driver’s insurance falls short, so you’re not left shouldering the financial burden of an accident that wasn’t your fault. However, navigating the claims process can be challenging, so you should always have a trusted car accident lawyer by your side. They will fight for your rights and the compensation you’re entitled to.
Umbrella Policies and Insurance Claims
Umbrella policies are relevant in some civil lawsuits, providing additional coverage beyond auto insurance policy limits. Most individuals who purchase umbrella policies have numerous assets they wish to protect. Therefore, umbrella coverage can supplement regular auto insurance to protect personal assets and property.
You should speak with a skilled and knowledgeable attorney about umbrella policies and how they may relate to your insurance claim. Your attorney can determine whether any available umbrella coverage applies to your claim.
Gathering Evidence and Documenting Your Injuries
Your attorney will collect relevant evidence of liability and documentation of your injuries. These records can substantiate your claims and inform the insurance company that you are serious about seeking monetary compensation for your injuries.
They may also need to speak to witnesses who observed the accident. Also, your lawyer may need to hire an expert witness to produce a report for evidence. All of this works to prove the extent of your losses, even if they exceed the insurance policy limits in question. Once you know your damages, your car accident attorney will explore ways to obtain full compensation whenever possible.
Insurance Companies Can be Difficult
Insurance companies are notorious for delaying the processing of claims and making injured victims feel like they do not have the right to seek financial compensation. Having an attorney who can negotiate with the insurance company is extremely important. You do not want to allow the insurance company to interfere with your right to examine the terms of any insurance policy relevant to your claim.
Insurance claim adjusters may use terminology to confuse you and even give you incorrect information. When you hire an attorney, they can handle all interactions with the insurance company. You need legal representation to ensure that you can pursue financial compensation for your injuries.
Seeking financial compensation beyond the policy limits of an auto insurance policy can be tricky, but it is possible with the right legal guidance. Your attorney will research each party’s insurance situation and identify ways to seek additional financial recovery.
Call a Car Accident Lawyer Today to Schedule a Free Consultation
Reach out to car accident lawyer to book a free consultation. You do not have to stand alone when negotiating with the insurance company. Experienced attorneys at our personal injury law firm in Austin understand how to strengthen your case and seek monetary compensation for your injuries while protecting your legal rights.