What Happens When a Car Accident Claim Exceeds Insurance Policy Limits?
Car accidents can cause serious injuries and property damage that often cost more than the at-fault driver’s insurance policy covers. When damages exceed policy limits, the at-fault driver is personally responsible for any remaining balance.
Insurance Policy Limits in Texas
Texas law sets minimum auto insurance requirements, but these limits are frequently insufficient for severe crashes.
Every auto insurance policy includes maximum payout amounts for bodily injury and property damage:
- $30,000 per person for bodily injury
- $60,000 per accident for bodily injury (multiple victims)
- $25,000 for property damage
If accident-related damages exceed these limits, the insurance company will only pay up to the policy’s maximum coverage.
Options for Recovering Additional Compensation
When damages exceed insurance limits, several legal avenues may help you recover the remaining costs:
Suing the At-Fault Driver
You can file a personal injury lawsuit directly against the driver to recover amounts beyond insurance coverage. However, collecting full compensation may be difficult if the driver lacks significant assets.
Pursuing Other Liable Parties
Additional parties, such as employers of commercial drivers, vehicle owners, or manufacturers of defective parts, may share liability and provide additional insurance coverage.
Using Your Own Insurance
If you have Underinsured Motorist (UIM) coverage, your own insurer may cover damages exceeding the at-fault driver’s policy.
Health Insurance Coverage
Your health insurance may help pay for medical expenses not fully covered by auto insurance. While you may need to reimburse your health insurer if you later receive a settlement or judgment, this option ensures you receive immediate medical treatment without waiting to resolve your claim.
Umbrella Policies
Some drivers have umbrella insurance policies that provide extra coverage beyond standard limits.
Bad Faith Insurance and Excess Judgments
If an insurance company unreasonably refuses to settle a claim within policy limits and the case results in a higher court judgment, the insurer may be liable for the entire amount. This is known as “bad faith.” Victims can file a separate bad faith claim against the insurer to recover excess damages.
How Claims Can Exceed Policy Limits
Severe car accidents often lead to damages that surpass policy coverage, including:
- Extensive medical treatment or long-term care needs
- Permanent disabilities or loss of earning capacity
- Multiple injured victims in a single crash
- Catastrophic property damage or totaled vehicles
For example, if you sustain $100,000 in medical costs but the driver only carries $30,000 per person in bodily injury coverage, the insurer will pay $30,000, leaving $70,000 unpaid.
Why Legal Representation Matters
Handling a claim that exceeds insurance limits is complex and often overwhelming for victims recovering from serious injuries. An experienced car accident lawyer in Waco can:
- Investigate all potential sources of compensation
- Negotiate settlements with multiple insurers
- Pursue lawsuits against all liable parties
- Identify bad faith insurance practices
An attorney understands the tactics insurers use to minimize payouts and can effectively counter these strategies. They alleviate any legal burden so that you may focus on recovery.
A lawyer will ensure evidence is preserved, expert witnesses hired when needed, and deadlines are met. As a result, you significantly increase your chances of securing full and fair compensation.