How Common is it for Auto Accident Settlements to Exceed The Policy Limits?
As healthcare and automotive costs rise, it is more important than ever to understand how your insurance policy limits work. These limits often affect the outcome of your auto accident settlement.
While the average accident does not hit the policy limit, the gap is growing smaller. In fact, the average car accident claims for bodily injury was over $17,024. The average property damage claim was about $3,493.
Those amounts are dangerously close to the minimum required insurance amounts for California residents. Below we explore how policy limits work, and how they affect your settlement.
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INSIGHTS INTO INSURANCE POLICY MAXIMUMS
Insurance companies have different maximum coverages rates that determine how much they pay out for an accident. For example, let’s say you got hit and had a passenger in the car. You need to know how much their insurance covers for both healthcare and automotive damages.
It is entirely possible to have medical bills that exceed the policy limits but have room to spare on the automotive claim.
Insurance companies call these two types of vehicle insurance:
- Bodily Injury Liability (BIL)
- Property Damage Liability
Bodily Injury Liability
BIL policies cover injuries to the drivers, passengers, and other crash victims. This liability has two components. The first portion covers how much each individual receives in claims, and the second type of BIL coverage is the cumulative amount they pay for all crash participants.
For example, your BIL policy maximum might be 20/50 while the defendant’s limit is 100/300. That means your policy reimburses one individual up to $20,000 for their medical fees. The defendant’s plan maxes out at $100,000.
The second number represents the maximum BIL amount your insurance company covers for the entire accident. Your coverage in the example above would be $50,000, and the defendant would be $300,000.
California’s requires a minimum BIL coverage of 15/30.
To put this in perspective, let’s assume your passenger, the defendant, and you each had $150,000 in BIL claims. Their insurance would not have enough in the policy to cover the defendant’s medical bills after covering your passenger and yourself.
Property damage liability
The maximum property coverage is the third component of your policy limits. For example, California requires all drivers carry a minimum of $5000 in property damage liability.
However, as we mentioned earlier, the average property damage claim is $3,493. The challenge is cars continue to get more expensive as the maximum number remains stagnant.
Therefore, you have many drivers who do not carry adequate insurance to pay for more expensive accidents. Underinsured drivers are one of the reasons why more accident settlements exceed the policy limits.
You need to talk to your attorney to find out what that policy maximum is to get the highest settlement from your accident.
If you go over the defendant’s settlement limits, you might need to use your policy. Hopefully, you will not exceed the policy limits on both insurance policies.
If the at-fault driver cannot cover or lacks the insurance to pay for your vehicle repairs, call us immediately at (760) 642-5475.
WHAT TO DO WITH UNDERINSURED AND UNINSURED DRIVERS?
When most clients find out an uninsured or underinsured driver hit them, they want to know if the policy covers the accident. The answer depends on the circumstances.
However, you cannot go after the insurance company for an amount past their insurance policy limit.
You have the right to ask the defendants’ insurance to cover your liabilities to the maximum amount in the plan.
Often, we help our customers sue their insurance company to collect the full amount owed to them from the settlement.
Unfortunately, one out of every four California drivers does not carry enough insurance to cover a significant accident. It is therefore in your best interest to get enough coverage to protect you from larger accidents.
One of the most popular products to help you with this is an umbrella policy. An umbrella policy covers you in case your primary insurance is not enough to cover the losses.
As the name suggests, the umbrella policy covers all your personal property. They even extend the limits on your auto and homeowners policy.
While we cannot get more insurance for you after the crash, you can stay protected with additional coverage for the future.
Plus, it is relatively inexpensive to purchase an umbrella policy. Ask your insurance provider to find out how much they cost.
Every driver needs car insurance. However, in today’s world of rising prices and increasing danger, make sure to get enough insurance to cover your needs.
Otherwise, you might lose out on settlement money from underinsured and uninsured drivers. Obviously, uninsured drivers will exceed the settlement limit, but underinsured drivers present a financial danger after the accident.
If you face a situation where your accident might exceed the settlement limit, call us today at (760) 642-5475. Our Carlsbad car accident lawyers provide you with a free consultation where we can discuss your options.