What If There’s Not Enough Insurance To Cover My Claim?

After many different kinds of accidents, from auto accidents to slip-and-fall and more, insurance companies take the brunt of the financial burden. However, insurance policies have limits, and the insurance company will typically only cover the expenses associated with the accident to the policy limit. But what happens when your insurance claim exceeds the policy limit? Read on to learn more. 

Understanding Insurance Policy Limits

Whenever you purchase a liability insurance policy, a policy limit will be set. The limit is the highest dollar amount of the losses that the insurance company will take responsibility for in a covered accident.  

For instance, consider that you purchase a liability car insurance policy. This policy has a $75,000 limit. If you’re found responsible for an auto accident that results in $100,000 worth of damages, your insurance company is only responsible for $75,000 of those damages. The $25,000 excess damages will need to be covered by a different source. 

If your insurance policy doesn’t cover your claim in its entirety, there are a few options available to you. To collect compensation for the excess damages, you may:

File a personal injury lawsuit against multiple defendants

In some cases, multiple parties may be determined to be responsible for the financial damages in an accident. This could allow for two different insurance policies to be used to cover the damages. Note that not all situations lead to more than one responsible party, so you should consult with a personal injury attorney to learn if this is the right approach for you. 

Attempt to collect the damages directly from a defendant

If the other party in the accident is at fault and your damages are higher than their policy limit, you may attempt to collect the damages from them personally. If the other party can’t afford to cover the damages, however, this may be difficult. You may file a legal negligence claim in this situation to prove the party’s fault and attempt to recover the damages in court. Again, contact an experienced attorney in this case for assistance. 

Using an umbrella insurance policy to collect the excess damages

If you have an umbrella insurance policy, you may be able to use it to cover the excess damages. This type of policy goes into effect when the claim exceeds the liability insurance policy’s limit. 

Make a claim with your own insurance for Uninsured/Underinsured Motorist Coverage

If you were involved in a motor vehicle accident and the at-fault party does not have bodily injury coverage, or does not have enough bodily injury coverage, then making a claim under your own Uninsured/Underinsured Motorist (UM) coverage is most often the best solution. UM coverage is one of the most important insurance coverages to have as it is the only insurance that you can count on (because you are the one the paid for it) if someone else causes an accident and injures you or your family members. Otherwise, you may be at the mercy of whatever coverage that at-fault drive happens to have. Unfortunately, insurance agents sometimes fail to provide this valuable coverage when trying to provide “the best quote,” which can lead to devastating real world results. 

Contact Weldon & Rothman to schedule a consultation for your personal injury case.