If you’re involved in a car accident and the damages exceed policy limits, it’s crucial to understand your options. Navigating this situation will require a comprehensive understanding and assessment of available insurance coverage and avenues for additional compensation.
Understanding Insurance Policy Limits
Insurance policy limits dictate the maximum amount an insurer is obligated to pay under a policy for covered losses, and understanding these limits is essential in evaluating coverage after an automobile accident.
Liability policies typically have two types of limits: per-person and per-accident limits. The per-person limit is the maximum amount payable for injuries to each individual, while the per-accident limit is the cap for all injuries and damages resulting from a single accident.
Options When Damages Exceed Policy Limits
When the cost of damages or medical expenses surpasses the insurance policy limits of the at-fault party, you might find yourself in a financially precarious situation. However, several avenues can be pursued to ensure you receive the compensation you deserve.
Filing a Claim Against Your Own Insurance
In scenarios where the at-fault party’s insurance is insufficient, turning to your own insurance policy could provide a crucial financial safety net. Here’s how this can work:
- Underinsured Motorist Coverage (UIM): If you have UIM as part of your own auto insurance policy, it can cover the difference between the at-fault party’s insurance limits and the total cost of your damages or injuries.
- Health Insurance: For medical costs, your health insurance may cover expenses that exceed the at-fault party’s policy limits. You will, however, be responsible for any deductibles and copayments.
Pursuing Legal Action
When other options are exhausted, pursuing legal action becomes a viable path for seeking compensation beyond what insurance policies cover. You may have the following options:
Suing the At-fault Party: If the at-fault party’s insurance is insufficient to cover your losses, you can file a lawsuit directly against the individual or entity responsible for the accident. This option may lead to the seizure of the defendant’s assets or wage garnishment if you win the case.
Third-Party Claims: If other parties contributed to the accident, there might be an opportunity to file claims against their insurance policies as well. For example, a manufacturer whose faulty car parts caused the accident.
Negotiation with the Insurer: Sometimes, insurance companies are willing to negotiate and pay out more than the policy’s stated limits to avoid the cost and time of a lawsuit. This option requires careful negotiation and, often, the expertise of a legal professional.
Payment Plans and Agreements: In some cases, the at-fault party might not have the resources to pay a lump sum for damages exceeding their policy limits. Structured settlements, or payment plans, can be arranged to cover the costs over time.
Exploring these options can be complex and might require the guidance of an experienced car accident lawyer in Fresno to navigate successfully. The goal is to ensure that you are not left bearing the financial burden of an accident that was not your fault.
Navigating a car accident that exceeds your policy limits can be challenging, but knowing your options and the proper legal steps is critical. If you find yourself facing potential out-of-pocket expenses, contact us today to schedule a free consultation so our Fresno personal injury lawyers can help you get the compensation you deserve so you can focus on your recovery.