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Accident Exceeds Policy Limits: What Are My Options?

If you’re involved in an accident where the damages exceed the at-fault party’s insurance policy limits, there are several options available to recover the remaining costs.

Personal Settlement with the At-Fault Party

After an accident, if the at-fault party’s insurance policy limits are insufficient to cover your damages, you might consider negotiating directly with them for the remaining amount. This option avoids a formal legal process, which can be time-consuming and costly. In these negotiations, you can propose that the at-fault party pay a lump sum or enter into a payment plan for the remaining damages. A lump sum payment means they would pay you a one-time amount to settle the case, while a payment plan would allow them to pay in installments over time. The terms of the payment plan, such as the duration and installment amounts, would need to be agreed upon by both parties.

This approach can work if the at-fault party has the financial means to make payments or if they are willing to avoid litigation. However, it can be challenging if they refuse or cannot afford to pay. If you do pursue this route, it’s advisable to formalize any agreement in writing to avoid disputes later.

Sue the At-Fault Party

If negotiations fail, you can file a lawsuit against the at-fault party to recover the excess damages. Through this process, you may be able to recover costs that exceed their insurance coverage. If the court rules in your favor, you will receive a judgment for the amount awarded.

Collecting this judgment depends largely on the financial situation of the at-fault party. If they have wages, you may be able to arrange for wage garnishment, where a portion of their income is directed toward paying off the judgment. If they have valuable assets, you might be able to seize or place a lien on their property to satisfy the debt. However, if the at-fault party has limited financial resources, it may be difficult or impossible to collect the full amount, even with a court judgment.

Underinsured Motorist Coverage (UIM)

If the at-fault driver’s policy is insufficient, your underinsured motorist coverage (UIM) may cover the difference between their insurance limits and the total cost of your damages. UIM coverage is optional in many states, but it’s an important safety net for situations like these.

The amount your UIM policy will pay depends on the limits you have selected when purchasing the policy. If your policy limit is higher than the at-fault driver’s policy, UIM can bridge the gap and help cover medical expenses, lost wages, and pain and suffering. Filing a UIM claim is typically done through your own insurance company, and it may require negotiation or arbitration to determine the final settlement amount, especially if there’s a dispute over the extent of your damages.

Umbrella Insurance

This is a type of personal liability coverage that kicks in when the underlying liability limits of standard insurance policies, such as auto insurance, are exhausted. If the at-fault driver carries umbrella insurance, this can provide additional funds to cover your damages that exceed their regular policy limits.

Your Own Insurance Coverage

If you have collision coverage on your own auto insurance policy, you can file a claim with your insurer to cover damages to your vehicle, regardless of who was at fault. This can be particularly useful if the at-fault driver’s insurance doesn’t cover all the damage to your car. However, using your own insurance means you’ll have to pay a deductible, and there’s a chance your premiums could increase.

Working with an Attorney

If you’ve been in a car accident and are facing damages that exceed insurance policy limits, don’t navigate the process alone. The attorneys at Meinhart & Manning are experienced in personal injury and insurance claims, and we’re here to guide you every step of the way. Contact us today for a free consultation – simply fill out our online form or call us directly at (877) 776-1219. Let us help you secure the compensation you deserve!