Accidents are unexpected and in cases of these unforeseen situations that may leave us unable to work and with unplanned expenses, there are insurance policies to fall back on to cover damages. Insurance policies can help mitigate the costs of unexpected accidents up to a certain limit. However, there are situations where damages exceed the maximum policy amount, leaving victims unsure of what to do next. We explore what happens in these situations and how you can navigate them.
What is a Policy Limits Settlement?
A policy limits settlement is the maximum amount an insurance policy will pay out for a specific claim. These are amounts outlined when you sign up for insurance and can vary depending on the type of coverage.
For example, per the Department of Revenue, Missouri requires residents to at least carry minimum liability coverage which accounts for $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 per accident for property. It also requires a minimum amount of uninsured motorist coverage.
Drivers may likely carry liability limits well over what’s required. In those cases, the policy limits settlement will apply to that specific policy. If an auto insurance policy has a liability limit of $100,000 per person injured in an accident, that is the maximum the insurance company will pay for medical expenses, lost wages, and other damages incurred by each injured party.
What Happens If Medical Bills Exceed Policy Limits?
Unfortunately, in cases of serious accidents, it is not uncommon for medical bills alone to surpass policy limits. In situations that involve lifelong injuries and impairments or severe injuries such as traumatic brain injuries, severe burns, or spinal cord injuries, the cost of care can quickly exceed the limits of an insurance policy. These are considered catastrophic injuries that require extensive hospitalization, surgeries, rehabilitation, and at-home care.
Even in these scenarios, insurance companies will only pay up to the limit specified in the policy. The injured party may then be left with significant expenses. However, there are options to explore to help with these exorbitant amounts.
Who Pays the Damages That Exceed the Policy Limits?
When damages exceed the limits of the policy, the responsible party is typically liable for paying whatever is left over. However, the ability of the responsible party to pay these damages out-of-pocket varies. In many cases, it is not surprising that responsible parties do not have sufficient assets or resources to make up the difference, and recovering these additional damages can become challenging. There are ways that an attorney can help you collect additional damage that exceeds policy amounts. This includes:
- Umbrella Insurance Policies. These are liability insurance that provides additional coverage beyond standard liability limits. If the at-fault party has an umbrella policy, it may be used to cover excess damages.
- Personal Assets. If the at-fault party has substantial personal assets such as real estate or investments, they could be pursued to satisfy the excess damages. This process usually requires legal action and can be drawn out and complex.
- Negotiation. Sometimes, insurance companies may agree to pay more than policy limits to avoid litigation. Skilled negotiation by a personal injury attorney can help you recover a settlement that exceeds policy limits.
- Legal Action. In claims where negotiations fail or the at-fault party refuses to pay, legal action may be necessary. This involves filing a lawsuit and seeing the case play out in court.
Consult an Experienced Personal Injury Attorney
Navigating the complexities of accident settlements that exceed policy limits requires the expertise of a knowledgeable personal injury attorney. With over a century of collective experience across the team, DM Injury Law is the firm to turn to in your time of need. Our attorneys can assess your case, determine liability, negotiate with insurance companies, and pursue legal action on your behalf if necessary.
We work to help you recover the compensation you deserve and will explore different avenues if damages exceed the limits of insurance policies. Understanding your rights and options with the help of a legal professional can make a significant difference. If you find yourself in such a situation, don’t hesitate to reach out to our team.