How Car Insurance Liability Coverage May Limit Recovery After A Personal Injury Accident Lawsuit

By October 20, 2010 January 11th, 2018 Attorney-Lawyer

Anyone that owns a car is used to paying for car insurance. Most of us pay it begrudgingly just in case we find ourselves the cause of an accident or in the event someone steals or damages our own car. Most people don’t pay much attention to the liability limits they have in their car insurance policy their then to be certain that they meet the state minimums. State minimums vary widely with respect to how much coverage a resident is required to carry in her auto insurance policy. Clearly, a policy holder’s choice of coverage limits has a direct affect on the premium amount. For instance, In California a driver must have a minimum of $15,000 in coverage for injury/death for one person, $30,000 for injury/death to more than one person and $5,000 minimum for property damage. A policy holder that chooses the minimum coverage is legal as far as the state of California is concerned. The premium for minimum coverage is much lower than for higher coverage limits and for that reason many driver’s carry only the state minimum coverage. While the state minimum coverage will indeed make a driver legal, it can lead to huge problems in the event the driver in involved in a car accident where she is the negligent driver.

When a policy holder is involved in an accident, the insurance company is contacted. The insurance adjuster will then investigate the accident and make a preliminary determination of who was at fault. If the insured was indeed the negligent party, then the insurance company will start to determine the damages – both property and personal. The victim of the accident will submit medical bills, repair estimates and a variety of other documentary evidence of the injuries she has sustained as a result of the car accident. Once the victim has completed her treatment and has determined the amount of her damages she will submit a damage package to the adjuster with a dollar amount for which she is willing to settle the case. What happens, though, if the amount of damages sustained by the victim exceed the coverage limits of the policy?

An insurance company is only liable to payout damages up to the limit of the policy. What this means for the victim is that if the her injuries exceed the coverage limits then the defendant will be personally responsible for the amount that exceeds the coverage limits in most cases. In most cases, the driver’s that carry only the state minimum in insurance coverage tend to do so because they cannot afford a higher premium. Not surprisingly, they are less likely to have the ability to pay for damages in excess of the policy coverage as well. Of course in some cases the defendant may have the resources to cover what the insurance company does not cover.

Deciding whether or not to accept a personal injury settlement offer can be a complicated decision and will likely involve a number of factors. Among those factors a victim should consider the defendant’s coverage limits and whether there is a realistic chance of getting any additional compensation directly from the defendant if she refuses a settlement for the amount of the policy coverage limit.

If you have any additional questions or would like a confidential assessment of your personal injury case, please contact California personal injury attorney Emery Ledger of Ledger & Associates at 1-800-300-0001 or online at