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How to Handle an Accident That Exceeds Policy Limits

Posted on June 10, 2024 in Car Accidents

Insurance is meant to provide financial peace of mind. It offers a means of paying for unexpected accidents, injuries and property damage suffered by a victim. If you have insurance or someone else’s policy is responsible for paying you, you may assume the full extent of your losses will be covered. Unfortunately, losses that exceed policy limits are common in California.

Accidents exceeding car insurance policy limits


Check for Additional Sources of Coverage

In California, automobile insurance is required by all motor vehicle drivers. If you get injured in a car accident and need to file a claim against another driver, you should expect at least $15,000 per person and $30,000 per accident in bodily injury insurance, plus $5,000 in property damage insurance, for your losses. These are the required minimum amounts of car insurance in the state.

After your car accident, contact the other driver’s insurance company to inquire about the available coverage amounts. If your damages exceed the driver’s policy’s limits, contact your own car insurance company. You may have various types of supplemental insurance available, such as collision insurance, comprehensive insurance and medical payment insurance. 

You may also have coverage available from other types of insurance policies, such as your health insurance. A first-party insurance claim could supplement a third-party claim to help cover the gap between your damages and policy limits. Other parties may also be held accountable for your accident, such as the driver’s employer or a vehicle manufacturer. Explore all available sources of coverage before settling your case.

File a Lawsuit

If accident damage exceeds insurance coverage limits, another option for obtaining financial compensation is filing a lawsuit. A lawsuit has the power to hold someone liable, or financially responsible, for damages outside of the insurance system. If an individual or entity is found liable in a personal injury lawsuit, he or she can be held accountable for paying for the victim’s expenses – even if his or her insurance does not cover the costs.

A successful lawsuit could order a defendant (accused party) to pay more than insurance policy limits for negligently causing an accident. The plaintiff or injured victim may be awarded a court judgment in an amount exceeding a policy’s maximum coverage limits. The defendant will have to pay the judgment.

Filing a lawsuit, however, is not always worth the time or expense. If the defendant named in your lawsuit does not have the resources or assets to pay a judgment award, he or she could file for bankruptcy and avoid paying the judgment altogether. You should consult with an attorney handling injury cases in LA about your specific circumstances to determine if filing a lawsuit is worthwhile.

Seek Legal Advice

Automobile accidents and other harmful incidents can result in expensive injuries and related losses, such as lost income, disability costs and property damage. In California, the cost of an accident can easily exceed the limits of an insurance policy. If you find yourself in this situation, seek advice and representation from an experienced attorney to help you move forward.

An accident lawyer in Los Angeles can analyze your case and investigate to find all potential sources of financial recovery, including supplemental coverage from your own insurance company or a lawsuit against one or more parties. For more information about seeking compensation for losses that exceed insurance policy limits, contact Rose, Klein & Marias, LLP to request a free consultation with an attorney.