When a car accident results in damages that outstrip the at-fault driver’s insurance coverage, victims face complex challenges beyond medical concerns and property repair. The insurance policy limits, set to define maximum payouts, can leave victims grappling with significant unpaid medical bills, lost wages, and vehicle damages. This situation demands a strategic approach to secure rightful compensation, often involving legal expertise and exploring multiple insurance avenues. Navigating this landscape requires understanding how insurance policies work, the frequency with which claims surpass coverage, and the various options available to recover additional funds.
Understanding What Happens When a Car Accident Claim Exceeds Insurance Limits
Each car insurance policy has specific limits detailing the maximum compensation it will provide after an accident. Typically, these include separate caps on bodily injury and property damage claims. For instance, in Rhode Island, minimum required coverage limits are $25,000 per person and $50,000 per accident for bodily injury liability. While these minimums cover many common incidents, severe accidents with extended hospital stays or catastrophic damage often push beyond these thresholds.
Even with coverage from major insurers like Allstate, State Farm, Geico, or Progressive, the insurance company cannot pay beyond the policy limit. This often leaves victims responsible for costs exceeding those limits.
- Insurance policy limits specify maximum payout amounts.
- Separate limits exist for bodily injury and property damage.
- Minimum state coverage may be insufficient for severe accident costs.
How Often Do Claims Surpass Insurance Limits?
Surprisingly, car accident claims exceed policy limits more frequently than one might expect. According to analysis from reputable sources, the average bodily injury claim hovered around $20,000 as of 2020. Property damage claims averaged nearly $4,700, which often falls within minimum coverage ranges.
However, hospital stays dramatically inflate medical expenses. The average American hospital day costs approximately $4,000, putting a single week-long admission at a staggering $28,000. Combining this with substantial car repairs can push the total claim beyond even extended insurance limits from providers like Nationwide, Liberty Mutual, or Farmers Insurance.
- Average bodily injury claims can approach or exceed minimum policy limits.
- Hospitalization costs play a critical role in elevating total damages.
- Property damage multiplies out-of-pocket risk when coverage is minimal.
Options Available When Facing a Claim Exceeding Insurance Coverage
Victims with claims that outgrow insurance limits are not without recourse. Exploring alternative solutions can maximize compensation and mitigate financial hardship.
File a Claim with an Umbrella Insurance Policy
Sometimes the at-fault driver carries an “umbrella” insurance policy. This secondary coverage is intended to supplement primary policy limits by covering costs that exceed the standard cap. Umbrella policies can span bodily injury, property damage, and legal defense costs.
- Secondary insurance supplements standard policy coverage.
- Can cover damages beyond the primary insurance limits.
- Often protects policyholders from lawsuits.
If you discover the at-fault driver holds umbrella coverage from companies like American Family Insurance or Esurance, filing a claim against it can provide additional financial relief.
Utilize Your Own Underinsured Motorist Coverage (UIM)
Your own insurance policy may include Underinsured Motorist Coverage, which is designed to fill gaps when an at-fault driver’s insurance falls short. This coverage is especially valuable and typically doesn’t raise premiums when claims are made since you were not at fault.
- UIM covers medical expenses and damages over at-fault driver’s policy limits.
- Filed through your own insurer, allowing faster claim resolution.
- Protects victims from bearing full financial burden.
Pursuing a Personal Injury Lawsuit Against the At-Fault Driver
When insurance falls short, suing the at-fault driver personally becomes a viable avenue. You must demonstrate negligence, such as distracted driving or failure to obey traffic laws. In states like Rhode Island, the concept of pure comparative negligence means fault can be shared among multiple parties, allowing recovery from several sources.
- Legal action targets the individual’s personal assets beyond insurance.
- Requires proof of driver negligence or fault.
- May involve pursuing multiple defendants in multi-car accidents.
Legal representation is essential to navigate complex fault determinations and negotiations with default insurance carriers like Travelers Insurance or Liberty Mutual.
Why You Need an Experienced Attorney When Claims Exceed Insurance Coverage
In the intricate scenario where a claim surpasses insurance limits, expert legal assistance is crucial. Attorneys skilled in personal injury and insurance law assess complexities, identify all compensation opportunities, and aggressively advocate for victims.
- Evaluate all insurance policies and coverages involved.
- Determine potential for umbrella policy claims or UIM use.
- Represent victims through negotiations or litigation to maximize recovery.
Firms with track records working with clients insured by Allstate, Geico, Farmers Insurance, and others bring essential insight. Facing steep hospital bills and lost income, victims deserve fierce representation to prevent bearing undue financial burdens.
Frequently Asked Questions About Claims That Exceed Insurance Limits
- What if the at-fault driver doesn’t have enough insurance?
Your own underinsured motorist coverage or the driver’s umbrella policy may cover the excess. Otherwise, legal action might be necessary. - How long do I have to file a suit after an accident?
Statutes of limitations vary by state but typically range from one to three years for personal injury claims. - Can I negotiate directly with the insurance company?
You can, but insurance companies tend to limit payouts to policy amounts. Legal counsel can enhance negotiation outcomes. - Does filing a claim through my own insurance increase my premiums?
Not generally, especially when you are not at fault and claim under UIM coverage. - What if the at-fault driver has no insurance at all?
You may be able to file a claim with your uninsured motorist coverage or pursue legal action for compensation.