What Happens When a Car Accident Claim Exceeds Insurance Limits?

by | Feb 17, 2024 | Insurance | 0 comments

Ensuring safe driving without the risk of accidents and road danger seems impossible when everyone seems to be racing, be it on the roads or in life in general. Even after taking all precautionary measures, you still get hit by other vehicles, leaving you concerned with heavy medical and repair bills.

Sigh! You’ve got insurance. But wait, what if the damage exceeds insurance limits? Insurance coverage is like a safety net for all repair, medical, and hefty damage expenses. However, when the coverage surpasses that net, you’re left exposed.

Let’s begin with understanding insurance policy limitations. It’s the maximum amount you or the driver-at-fault insurance company will pay for damages in such accidents.

An insurance plan covers bodily injury liability. It covers medical expenses, which include hospital charges, doctor visits, and surgeries. It also provides coverage for lost wages for injured parties.

It also pays for the vehicle’s damage, repair, wear, and tear in a collision, called the property damage liability.

Types of Insurance Plans You Should Have

Based on bodily injury and property damage liability, the following strategies are applicable in your time of need:

Liability Coverage

When on the road, one must at least carry the minimum liability coverage the state provides. Several states offer bodily coverage of about $25,000 per person and $50,000 per accident as liability coverage.

However, suppose the costs of car accidents go beyond the coverage limit of your or the driver at-fault’s insurance policy. In that case, you must cover the remaining medical treatment costs yourself.  

Uninsured Motorist Coverage 

Suppose you have this modified version of insurance, uninsured or underinsured motorist coverage. In that case, it might help you claim the exceeding damages. This magical coverage comes into play when the responsible driver either lacks sufficient insurance (underinsured) or has none (uninsured). 

This coverage suits drivers best who can’t afford out-of-pocket expenses for heavy medical and repair bills.

Umbrella Insurance

Just like an umbrella protects you from drenching in rainwater, Umbrella Insurance protects the driver from drowning in financial strain. This supplementary policy serves to extend coverage beyond the limits of a standard insurance plan. 

Umbrella insurance for automobiles has exceptionally been crafted to address such circumstances. It serves as a defense against heavy medical bills. However, it would be best to meet specific qualifications to obtain an Umbrella policy, such as owning a home or meeting a predetermined liability threshold on your primary policies.

Claim Damage

Options to Claim Damage

Even though this condition sounds stressful, all you have is these limited options:

1. Suing the At-Fault Driver

The most significant query in collision cases is, who pays the damages exceeding the policy limits? 

In certain states, the driver who holds 51% of accident responsibility is liable to pay for insurance charges as well. This is where things get legal. If the other driver was clearly at fault, you may sue them for the remaining damages. However, be prepared for a legal rollercoaster. Gathering evidence, hiring a professional, and attending court appointments can all be time-consuming and tricky.

2. Negotiate With the Insurance Company

Navigation and back-and-forth dealing is like solving a puzzle to find common ground between two parties. It involves discussions on fault and damages and ideally leads to reaching an agreement. 

Insurance companies may occasionally be inclined to extend their boundaries. Particularly if the accident resulted from their insured’s fault and substantial evidence supports your claim. 

3. Explore Payment Plans

What happens if accident damage exceeds your car insurance? The last resort to wrap up this hassle is to explore payment plans for those heavy bills. In some cases, the at-fault driver might be ready to set up a payment plan to chip away at the remaining debt gradually.

You should consider seeking legal help before settling for this option. You always need to find out how consistently the other will pay you. In case of no other choice, consider filing a lawsuit, not against the insurance company but against the at-fault driver in the hope of compensation.

Handling Exceeded Limits

Tips for Handling Exceeded Limits

Here are some tips for handling Exceeded Limits:

Act Wisely 

Consult a lawyer right after the collision. The limit for filing lawsuits varies from state to state. So waste no time and act swiftly.

Document Everything

You want to ensure you get all the evidence that may help you in legal proceedings. Record medical bills, car repair estimates, lost wages, and any communication with the at-fault driver and insurance company to benefit from it all.  

Updated Coverage Policy

With all the new, modified versions of policies available, you want to stay updated with the latest beneficial policies. You should update your plan occasionally to avail the best package for crucial conditions.

Final Thoughts

Exceeded insurance claims can derail one emotionally and financially. However, this hurdle can be tackled head-on with the right approach and a solid grasp of the situation. While bearing the financial burden yourself is straining, this article has provided insight into potential solutions.

Got more questions? Ask away!

Patience Noah

Patience Noah migrated to the United states in 2003 after the Liberian Civil War. She attended the University of Massachusetts Dartmouth and got her B.A in Marketing. After graduating college in 2013, she started her career in the insurance industry cold calling.

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