What Happens When A Car Accident Claim Exceeds Insurance Limits?

When auto insurance limitations are exceeded, additional insurance coverages may be available to pay the remaining expenditures. If other coverages are unavailable or have been exhausted, a lawsuit may be the only route for an accident victim to avoid financial hardship.

Others are protected by auto insurance policies against the costs of injuries and property damage sustained in auto insurance accidents.

Those who have comprehensive and collision insurance may be able to protect themselves from the costs of damages incurred in an accident, regardless of who is at fault. Others are more likely to have financial difficulties as a result of medical bills and property damage.

Finally, a vehicle accident lawyer may be required to hold responsible parties accountable and guarantee that genuine claims are paid by auto insurers.

Filing a lawsuit against an offending driver might be the only way to obtain full compensation for injuries and property damage suffered in an Illinois auto accident.

How Auto Insurance Works in Illinois

Illinois is an at-fault state that holds drivers liable for causing accidents that injure others or damage property. State law also requires all motorists to carry at least minimal levels of insurance coverage. Illinois auto insurance minimums only provide so much relief for accident victims.

The legal minimums for auto insurance coverage in Chicago and the rest of Illinois are:

  • $25,000 for bodily injury or death per person.
  • $50,000 for injury or death to more than one person.
  • $20,000 for property damage suffered by another person.

If a driver has only the state-mandated minimum auto insurance and causes an accident, the medical bills and property damage might rapidly exceed those sums.

If someone without health insurance experiences a significant or catastrophic injury, overall medical bills might potentially reach $25,000 if they do not have insurance. Medical expenditures are significantly easier to exceed when a vehicle is carrying more than one person.

While each injured person is eligible for up to $25,000, the total amount available for a single accident is $50,000. It’s more possible that the $50,000 cap for the accident will be achieved if more passengers suffer serious injuries.

What Is An Insurance Policy Limit?

Simply defined, a policy limit is the most a particular insurance policy will payout. As an example, imagine that you were hurt in an accident with a distracted driver in Los Angeles County. An investigation confirmed that the other driver was solely responsible for the crash.

If that driver had the mandatory minimum 15/30/55 liability coverage, the most you could claim from their policy is up to $15,000 per person in injuries and $5,000 for property damage. 

Your Three Primary Options For Collecting In Excess Of A Policy Limit

If you were seriously injured in a car accident in California, your damages may be well in excess of the at-fault party’s policy limit. Here are your three basic options for seeking compensation in excess of the insurance policy limit after an auto accident: 

  • A Lawsuit Against the At-Fault Party: You may be able to sue the at-fault party for compensation in excess of the insurance limit. While this is an option in some limited circumstances, it is usually quite difficult. A driver is frequently found to be at blame in an automobile collision. You may be able to collect from them if they have little (if any) personal assets.
  • A Claim Under Another Insurance Policy: You are not limited to seeking compensation from a single insurance policy in the event of a car accident. You can file claims against numerous insurers if various parties are responsible for your accident. Additionally, if you have uninsured/underinsured motorist coverage (UM/UIM), you may be eligible for additional reimbursement from your own insurance.
  • A Bad Faith Lawsuit Against the Insurer: Finally, there are some circumstances in which you can sue an insurance company for damage beyond the policy limit. If your initial policy limit claim was delayed or denied in bad faith, the insurer could end up being liable for the full extent of your damages—even if those damages are in excess of the policy limit.

When a Car Accident Claim Exceeds Insurance Limits, UIM Coverage Can Help

Only one auto insurance coverage will protect a vehicle owner from the costs of personal injuries sustained in an accident. Uninsured/underinsured motorist coverage is what it is called.

When medical costs and property damage exceed the value of the at-fault driver’s insurance, uninsured/underinsured motorist coverage may reimburse the difference up to the policy limitations.

If an accident is caused by an uninsured or underinsured motorist, uninsured/underinsured motorists coverage becomes the primary policy that applies. Almost a quarter of Illinois motorists drive without insurance. Uninsured drivers are considered hit-and-run drivers.

Uninsured/underinsured motorist coverage can aid in this situation. When the driver and passengers are wounded in an accident caused by another driver, the total damages could reach $50,000. A catastrophic injury would almost probably exceed the $25,000 limit for a person.

Property damage could also exceed the $20,000 threshold. Instead of collision coverage, the victimized motorist may just have minimum liability insurance. If this is the case, the cost of repairing or replacing the damaged car might be in excess of $20,000.

When the other motorist’s insurance is insufficient or nonexistent, an uninsured or underinsured motorist claim should cover some or all of the costs up to the policy limits.

Seizing a Driver’s Property When a Car Accident Claim Exceeds Insurance Limits

When an at-fault driver is identified and insured, that does not mean accident victims have an easy pathway to obtaining just compensation.

That driver’s insurer should accept the liability for the accident and provide reasonably fast payouts. Illinois and other states generally give insurers up to 30 days to pay legitimate claims.

Even when that happens, the offending motorist might not have enough insurance to cover the costs. When that is the case, an accident victim might have to file a lawsuit to have any chance at being fully compensated.

An experienced car accident attorney is an essential tool for helping to prepare a strong case against an offending driver. Accident victims can file lawsuits for damages that are not covered by insurance. When an offending driver drove especially recklessly, punitive damages might be sought.

Obtaining a legal judgment against an offending driver might enable one or more accident victims to seize that driver’s personal property.

Doing so would require an initial judgment against the at-fault driver and car owner. If the judgment is not paid, then additional legal actions might be needed to obtain a court order to seize the defendant’s assets.

Getting a Court Judgment When a Car Accident Claim Exceeds Insurance Limits

The average cost of car accident injuries financially could cripple many accident victims and their families. Health insurance and other coverages might be available to help. But the average costs of many claims could surpass the policy limits on relevant insurance.

Just the cost to treat accident injuries could surpass available insurance coverage. The National Safety Council says the average cost to treat accident injuries in 2019 were:

  • $1.7 million per death.
  • $98,400 per disabling injury.
  • $28,500 per evident injury.
  • $23,400 per possible injury.
  • $12,500 when no injury initially was observed.

The National Safety Council says the average cost for damages was $4,600 in 2019. With average damages significantly lower than even the least-expensive injury costs, insurance usually can cover the costs of damage to a vehicle.

It is the cost of medical treatment that typically causes a claim to exceed policy limits. That makes it very important to maintain health insurance coverage for anyone who regularly drives or rides in a private passenger vehicle.

Determining Damages from an Accident

Even when there is ample insurance available to cover the cost of injuries and other damages, many accident victims file incomplete claims. An experienced Chicago accident attorney is an excellent resource to help an accident victim get the most out of a claim.

Retaining an attorney can accomplish two things that could have positive outcomes. It tells all parties involved that the victim is serious about holding the liable party accountable for all damages. It also enables the accident victim to force insurers and any bill collectors to communicate only through the attorney.

Meanwhile, the accident victim could continue obtaining necessary medical treatment, such as physical therapy. The attorney also could help to ensure all applicable damages are accounted for in any insurance claim or legal filing.

How Auto Insurers Might Undermine Claims

Insurance companies are for-profit businesses that want to limit their respective liabilities. Even the victims of car accidents could find their own insurers using tactics that are designed to reduce potential claims payouts. They can be certain the insurer for the at-fault driver will do its best to reduce any potential claim’s payout.

A variety of common insurance company tactics help insurers undermine legitimate insurance claims. It starts with the first phone call you get from an insurance adjuster. The adjuster will ask how the victims are feeling in hopes of getting a positive response.

Saying something like “I feel good” might cost thousands of dollars in potential damages for pain and suffering. The insurer is looking for any excuse to reduce a possible payout. The more likely that one party clearly is at fault, the more likely that person’s insurer will try to lower the settlement amount.

If an insurer offers a quick settlement and promises rapid payment, that is a sure sign the insurer is low-balling the settlement offer. In such cases, insurers often hope that an accident victim is concerned about costs and not thinking clearly.

Offering a quick settlement right away could help the insurer to contain costs and pay much less than the claim should obtain.

An insurer will also do its best to put at least some blame on the accident victim. Illinois is a comparative liability state. That means any insurance settlement could be reduced by a percentage that is equal to the accident victim’s comparative liability.

An insurer might get an accident victim to admit some small error. If so, that could lower the settlement. If the fault were equal between the parties, there would be no settlement.

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