What if a Car Accident Exceeds Insurance Limits?

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When you’re in a car accident, getting compensation is likely one of the top things on your mind.

You may have medical bills, a damaged vehicle, and other losses to think about.

As you work through the insurance policies, damages, and claims, you may come to the realization that your car accident damages exceed the insurance limits. Now what?

Our Philadelphia car accident lawyers explain what you can do if a car accident exceeds the insurance limits.

What to Do If a Car Accident Exceeds the Insurance Limits

If a car accident exceeds the insurance limits, you can sue the driver directly for the remaining balance. Additional third parties may be liable to pay or an employer if the driver was driving commercially. You may have uninsured or underinsured motorist coverage that may provide compensation. Insurance bad faith may be an option, and you can check if the driver has an umbrella policy.

Get legal help

If your damages for a car accident are higher than your policy limits, we invite you to contact our lawyers for a review of your case. There may be things that you can do to claim the remaining compensation. Our lawyers can look at all aspects of your situation and explain how our representation may help.

Things You Can Do if a Car Accident Exceeds Insurance Limits

Here are six things you can do if a car accident exceeds policy limits:

Sue the driver directly

When a car accident exceeds insurance limits, the driver may be responsible for the remaining amounts. They may be personally liable to pay from their own resources. If you select limited tort liability, you must suffer serious injuries to seek pain and suffering and other non-economic losses from the responsible party. However, anyone can seek compensation for unreimbursed economic losses. There are some exceptions to the limited tort injury requirement.

Limited tort not applicable

Even if you opted for limited tort coverage, there are some scenarios where the law exempts you from the limitation. You may still seek full compensation, regardless of the severity of your injury, if the other driver:

  • Is convicted of drunk driving related to the accident
  • Is driving a vehicle registered in another state
  • Intentionally tried to hurt themselves or others or operates their vehicle in a way that creates a grave risk of causing injury
  • Does not have the required car insurance minimums

75 Pa.C.S. § 1705(d) says that even if a person originally chooses limited tort, they’re not bound by it in any of these circumstances.

Additional defendants

Often, if a driver has only the minimum insurance (in Pennsylvania, it’s $15,000 per injured person, $30,000 per accident for injuries, and $5,000 for property damage), they do not have the assets to personally pay compensation. However, there may be parties other than the driver who also have legal liability for an accident. You may evaluate the case to see if any of the following parties are involved and have legal liability:

  • Employer of the driver
  • Government entity for poor road maintenance
  • Vehicle manufacturer for design or manufacturing defect
  • Restaurant, bar, or tavern for serving an intoxicated patron
  • Additional third parties involved in an accident

Fault for a car accident isn’t always easy to determine. There may be underlying circumstances that create third-party liability. If an additional party is liable, other than the driver, you can pursue compensation from them following a car accident.

Defendant’s Umbrella Policy

An umbrella policy is an insurance policy that provides coverage if someone is sued past their insurance coverage limits. An umbrella policy provides a safety net if the person’s home or auto insurance coverage isn’t enough. If your car accident case exceeds insurance policy limits, you should check if the person has an umbrella policy. Businesses and people with assets they want to protect are the most likely to have an umbrella policy that can provide compensation.

Uninsured/underinsured motorist

Uninsured and underinsured motorist coverage is insurance that you buy for yourself. It pays compensation if the car accident exceeds the insurance limits for the at-fault party. Pa.C.S. Title 75, Subchapter C explains uninsured and underinsured motorist coverage in Pennsylvania. An insurer providing motor vehicle liability insurance must offer uninsured and underinsured coverage. To recover non-economic damages through an uninsured or underinsured motorist policy, the person must elect full tort coverage when purchasing their car insurance.

Insurance Bad Faith

Insurance companies have a legal duty to settle their claims promptly and fairly. If they evidence bad faith in the discharge of their contractual duties, the insurance company may be liable for the entire amount of a judgment against the insured, secured by the third party, even if there was a policy limit that was much lower.

For example, you are in a car accident. You have $100,000 in damages caused by the insured party. The insured party elected a policy limit of $50,000. It’s clear that you have at least that in damages, but the insurance company refuses to pay you the $50,000, acting in bad faith. If you must take legal action and you receive a judgment of $100,000 from the jury, the insurance company may be liable for the entire $100,000.

The legal burden to prove bad faith is clear and convincing evidence. See Cowden v. Aetna Cas. Surety Co., 389 Pa. 459 (1957), establishing bad faith liability in Pennsylvania.

Health Insurance, Disability Insurance

Once all other options are exhausted, your own insurance policies may help with losses and expenses relating to a car accident. You may have health insurance that can help with medical bills. If you are unable to work, you may have disability insurance through an employer, or you may apply for benefits through government-funded disability programs.

Speak to an Auto Accident Lawyer About Excess Damages

If you have been in a car accident, we invite you to contact Gibbons & Crichton. Our team can evaluate your situation and the possibilities for claiming compensation. We may represent you in a claim. Call or message us now to talk about your case.

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