How Often Do Auto Accident Settlements Exceed the Policy Limits? - Weinberg Law Offices P.C. (2024)

May 16, 2024 | By Yoni Weinberg | Read Time: 4 minutes | Auto Accidents

You may be wondering, “Can I collect injury compensation beyond the insurance policy 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.

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.

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What Happens if Accident Damage Exceeds Your Car Insurance?

In California, if your car accident claim surpasses your insurance policy limits and the insurer rejects a reasonable settlement offer within those limits, it’s a risky move. Ultimately, if the court ruling surpasses your policy limits, your insurance company becomes responsible for the full judgment, even the excess amount.

It would be best to have an experienced lawyer guide you through the complicated process of pursuing compensation beyond the defendant’s liability coverage.

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.

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.

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.

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.

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.