You may be wondering, “What if my car accident claim exceeds insurance limits in California? Can I sue for more than car insurance limits?”
Every auto accident settlement differs as no two cases are exactly alike. One crucial factor in determining your potential settlement value is the amount of the defendant’s available liability insurance. California law requires that drivers carry a minimum amount of liability insurance coverage.
Understandably, many injured victims want to know how often auto accident settlements exceed the policy limits.
If you sustained injuries in a car accident caused by another party’s negligence, contact a California car accident lawyer at Weinberg Law Offices to discuss your case.
Many auto accident settlements don’t exceed the available insurance limits, but that doesn’t mean it can’t happen. If you believe your claim exceeds policy limits, you need to hire a skilled car accident lawyer.
Pursuing a case for more than policy limits can become complicated quickly and require filing a lawsuit.
Why Settlements Might Exceed Insurance Policy Limits
Auto accident settlements exceeding insurance policy limits are rare, but they can occur under certain circumstances. Here are some reasons why this might happen:
- Serious Injuries and Extensive Medical Costs. Catastrophic injuries, such as brain trauma or spinal cord damage, can lead to medical bills and future care costs that far exceed the at-fault party’s policy limits.
- Pain and Suffering. In some states, victims can pursue damages for pain and suffering, which are not always capped by the policy limits. These non-economic damages can sometimes push the settlement amount beyond the available coverage.
- Multiple Victims or Claimants. When several people are injured in an accident, the total settlement amount might exceed the policy limits, especially if injuries are severe or fatalities occur.
- Punitive Damages. If the defendant’s actions were egregious (e.g., drunk driving), the court may award punitive damages, which can exceed the available policy limits in order to punish the wrongdoer.
When Settlements Might Exceed Insurance Policy Limits
Certain factors can lead to a higher settlement than initially expected, even if the policy limits are exceeded:
- High Severity of Injuries or Death. If the accident causes severe injuries or death, medical expenses and loss of earning capacity can lead to a settlement higher than the policy limits.
- Multiple Insurance Policies. If more than one party is responsible for the accident, multiple insurance policies may come into play, and additional coverage could result in a settlement beyond the initial policy limits.
- Lack of Sufficient Insurance Coverage. When the at-fault party’s coverage is insufficient, your own underinsured motorist coverage may help cover the additional expenses, leading to a settlement that exceeds the policy limits.
- Court-Ordered Settlements or Judgments. In some cases, a court may order additional damages beyond the insurance coverage, especially if the case involves gross negligence or intentional harm.
- Bad Faith Insurance Practices. If the insurance company mishandles the claim or denies it unfairly, a bad faith lawsuit could result in additional compensation, potentially exceeding the policy limits.
What Happens If Your Car Accident Claim Exceeds Insurance Limits?
If a car accident claim in California exceeds your insurance coverage limits, the insurance company might have to pay the entire judgment, including amounts above your policy limits.
It would be best to have an experienced lawyer guide you through the complicated process of pursuing compensation beyond the defendant’s liability coverage.
Can Uninsured/Underinsured Motorist Coverage Help?
Do you have uninsured/underinsured (UM/UIM) coverage on your own policy? If so, you might be able to pursue a claim for the remaining amount of your damages.
It’s important to understand that UIM claims are treated differently than you might expect.
Your insurance company will view you as a third-party claimant; that means they will view you as an adverse party. They will not pay out your UIM limits simply because you purchased a policy through them.
Are There Multiple Parties Responsible for Your Injuries?
Was there more than one party responsible for your injuries? Perhaps there are multiple vehicles involved, a defective auto part, or the defendant was in the course and scope of their employment at the time of the accident.
Your California car accident lawyer will help you pursue all avenues of recovery for your damages. Depending on who the involved parties are, it could open the door to significantly higher insurance limits.
What Does It Mean to Sue Directly or Pursue Other Legal Avenues?
While you can sue the person directly, it doesn’t always make financial sense unless you can collect assets. Many drivers who carry low liability insurance are “judgment proof.”
That means if your claim exceeds the policy limits and there is a judgment in your favor, the defendant doesn’t have the means to pay you.
In other words, you may win, but you won’t end up getting anything.
Can You Sue the Insurance Company for Bad Faith?
In limited scenarios, you might be able to sue the insurance company. If your claim clearly exceeds the available policy limits and the insurance company refuses to settle for limits, they could open themselves to a bad faith claim.
If your case goes to trial and a jury awards damages that exceed the available policy limits, the insurance company could be responsible for paying the entire amount.
California Minimum Liability Insurance Requirements
Drivers in California must comply with government insurance regulations that stipulate the minimum amount of insurance coverage you must purchase. Currently, the required liability insurance limits in California are:
- $15,000 bodily injury or death for one person per accident
- $30,000 bodily injury or death for multiple parties (combined) in one accident; and
- $5,000 property damage.
When multiple people sustain injuries, they must share the $30,000 bodily injury limit.
One person cannot receive more than the $15,000 per person limit, and the policy will not pay more than $30,000 in total.
For example, if there are five injured people, the $30,000 will be divided between all five injured parties.
In a serious collision, that $30,000 can disappear immediately. In situations where there are multiple injured parties, insurance policy limits will often come up short.
While drivers should try to purchase as much liability insurance coverage as they can afford, many people opt for the lowest premiums possible.
The California Department of Insurance notes more comprehensive coverage with increased limits is:
- $100,000/$300,000 bodily injury per accident;
- $50,000 property damage;
- $5,000 medical payments;
- $30,000/$60,000 uninsured/underinsured motorist bodily injury;
- $250 comprehensive deductible; and
- $500 collision deductible or waiver on collision deductible.
California is one of the states with the lowest liability insurance requirements, which means there’s always a risk that your claim value could exceed the at-fault party’s insurance limits.
FAQs About Auto Accident Claims and Insurance Limits
Can I Recover Damages Beyond the At-Fault Driver’s Insurance Policy Limits?
Yes, you may be able to recover damages beyond the at-fault driver’s insurance policy limits by pursuing claims against other responsible parties or using your own uninsured/underinsured motorist coverage.
What Happens if the At-Fault Driver is “Judgment Proof”?
If the at-fault driver is considered “judgment proof” (meaning they lack assets to pay the judgment), it may not be financially worthwhile to pursue them directly. A lawyer can help explore alternative options.
How Does Underinsured Motorist Coverage Work in California?
Underinsured motorist (UIM) coverage can help cover damages when the at-fault driver’s insurance is insufficient. However, insurance companies often treat UIM claims as adversarial, and a lawyer may be necessary to maximize your claim.
Contact a Los Angeles, CA Car Accident Lawyer
Pursuing a car accident claim in California can be complicated. You need an experienced lawyer on your side who will determine all potential avenues of recovery.
Without a skilled legal advocate on your side, you could be missing out on the compensation you’re entitled to receive.
At Weinberg Law Offices, our legal team has years of experience representing injured victims in California car accident cases.
Contact our office today to schedule a consultation. Let us review your case and advise you on what happens if the accident damage exceeds your car insurance coverage.
Disclaimer: This content should not be construed as legal advice.
As a personal injury attorney, my mantra is that there is no such thing as a “small case”. I will give 100% matter how big or small a case may be. I am fluent in English, Hebrew, and Spanish, languages which I use regularly in my practice.
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