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What Happens When a Car Accident Claim Exceeds Insurance Limits?

Written by Ankin Law Office

When car accident claims exceed auto insurance limits, additional insurance coverages might cover the rest of the costs. If additional coverages are not available or also are exceeded, then a lawsuit might be the only way an accident victim could avoid taking a financial hit.

Auto insurance policies protect others against the cost of sustaining injuries and property damage in auto insurance accidents. Those who carry comprehensive and collision insurance could protect against the costs of damages suffered in an accident, regardless of who is at fault. Others are more vulnerable to suffering financial hardships due to medical costs and property damage.

Ultimately, a car accident lawyer might be needed to hold liable parties accountable and ensure auto insurers pay valid claims. Filing a lawsuit against an offending driver might be the only way to obtain full compensation for injuries and property damage suffered in an Illinois auto accident.

How Auto Insurance Works in Illinois

Illinois is an at-fault state that holds drivers liable for causing accidents that injure others or damage property. State law also requires all motorists to carry at least minimal levels of insurance coverage. Illinois auto insurance minimums only provide so much relief for accident victims.

The legal minimums for auto insurance coverage in Chicago and the rest of Illinois are:

  • $25,000 for bodily injury or death per person.
  • $50,000 for injury or death to more than one person.
  • $20,000 for property damage suffered by another person.

When a motorist who has only state-mandated minimum auto insurance in place causes an accident, the medical costs and property damage easily could exceed those amounts. If someone does not have health insurance suffers a serious or catastrophic injury, $25,000 easily could be exceeded in total medical costs.

If a vehicle is carrying more than one person, the medical costs are much easier to exceed. While there is up to $25,000 available per injured person, the total amount for a particular accident is $50,000. When more passengers suffer serious injuries, it is more likely the $50,000 maximum for the accident could be reached.

How UIM Coverage Can Help When a Car Accident Claim Exceeds Insurance Limits

Only one auto insurance policy will protect the owner of a vehicle against the cost of personal injuries suffered while in an accident. That is uninsured/underinsured motorist coverage. Whenever the medical costs and property damage exceed the value of the insurance carried by the at-fault driver, uninsured/underinsured motorists’ coverage could cover the rest up to policy limits.

If an uninsured motorist or a hit-and-run driver causes an accident, uninsured/underinsured motorists coverage becomes the primary coverage that applies. Nearly 12% of Illinois motorists drive with no insurance coverage. A hit-and-run driver is considered to be an uninsured driver.

That is where uninsured/underinsured motorist coverage can help. The driver and passengers collectively could exceed the $50,000 maximum when injured in an accident caused by another motorist. Anyone who suffers a catastrophic injury certainly would exceed the $25,000 limit for an individual.

Property damage also could exceed the $20,000 minimum. The victimized motorist might only have minimum liability insurance instead of collision coverage. If so, the cost to repair or replace the damaged vehicle could exceed $20,000.

When the other motorist’s insurance is insufficient or non-existent, an uninsured/underinsured motorist claim should cover some or all of the costs up to policy limits.

Seizing a Driver’s Property When a Car Accident Claim Exceeds Insurance Limits

When an at-fault driver is identified and insured, that does not mean accident victims have an easy pathway to obtaining just compensation. That driver’s insurer should accept the liability for the accident and provide reasonably fast payouts. Illinois and other states generally give insurers up to 30 days to pay legitimate claims.

Even when that happens, the offending motorist might not have enough insurance to cover the costs. When that is the case, an accident victim might have to file a lawsuit to have any chance at being fully compensated.

An experienced car accident attorney is an essential tool for helping to prepare a strong case against an offending driver. Accident victims can file lawsuits for damages that are not covered by insurance. When an offending driver drove especially recklessly, punitive damages might be sought.

Obtaining a legal judgment against an offending driver might enable one or more accident victims to seize that driver’s personal property. Doing so would require an initial judgment against the at-fault driver and car owner. If the judgment is not paid, then additional legal actions might be needed to obtain a court order to seize the defendant’s assets.

Getting a Court Judgment When a Car Accident Claim Exceeds Insurance Limits

The average cost of car accident injuries financially could cripple many accident victims and their families. Health insurance and other coverages might be available to help. But the average costs of many claims could surpass the policy limits on relevant insurance.

Just the cost to treat accident injuries could surpass available insurance coverage. The National Safety Council says the average cost to treat accident injuries in 2019 were:

  • $1.7 million per death.
  • $98,400 per disabling injury.
  • $28,500 per evident injury.
  • $23,400 per possible injury.
  • $12,500 when no injury initially was observed.

The National Safety Council says the average cost for damages was $4,600 in 2019. With average damages significantly lower than even the least-expensive injury costs, insurance usually can cover the costs of damage to a vehicle.

It is the cost of medical treatment that typically causes a claim to exceed policy limits. That makes it very important to maintain health insurance coverage for anyone who regularly drives or rides in a private passenger vehicle.

Determining Damages from an Accident

Even when there is ample insurance available to cover the costs of injuries and other damages, many accident victims file incomplete claims. An experienced Chicago accident attorney is an excellent resource to help an accident victim to get the most out of a claim.

Retaining an attorney can accomplish two things that could have positive outcomes. It tells all parties involved that the victim is serious about holding the liable party accountable for all damages. It also enables the accident victim to force insurers and any bill collectors to communicate only through the attorney.

Meanwhile, the accident victim could continue obtaining necessary medical treatment, such as physical therapy. The attorney also could help to ensure all applicable damages are accounted for in any insurance claim or legal filing.

How Auto Insurers Might Undermine Claims

Insurance companies are for-profit businesses that want to limit their respective liabilities. Even the victims of car accidents could find their own insurers using tactics that are designed to reduce potential claims payouts. They can be certain the insurer for the at-fault driver will do its best to reduce any potential claim’s payout.

A variety of common insurance company tactics help insurers to undermine legitimate insurance claims. It starts with the first phone call to you from an insurance adjuster. The adjuster will ask how victims are feeling in hopes of getting a positive response. Saying something like “I feel good” might cost thousands of dollars in potential damages for pain and suffering.

The insurer is looking for any excuse to reduce a possible payout. The more likely that one party clearly is at fault, the more likely that person’s insurer will try to lower the settlement amount.

If an insurer offers a quick settlement and promises rapid payment, that is a sure sign the insurer is low-balling the settlement offer. In such cases, insurers often are hoping that an accident victim is concerned about costs and not thinking clearly. Offering a quick settlement right away could help the insurer to contain costs and pay much less than the claim should obtain.

An insurer also will do its best to put at least some blame on the accident victim. Illinois is a comparative liability state. That means any insurance settlement could be reduced by a percentage that is equal to the accident victim’s comparative liability.

An insurer might get an accident victim to admit some small error. If so, that could lower the settlement. If the fault is equal between parties, there would be no settlement.

Categories: Auto Accidents