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What Happens When Car Accident Claim Exceeds Insurance Limits?

Last updated: January 23, 2023

According to the Bureau of Transportation Statistics, 13 car accidents occur in the US every 60 seconds — and each of these accidents results in property damage and injuries, if not fatalities. Indeed, car accidents can be a traumatic experience, and when the claim exceeds the insurance limits, the situation can be even more stressful. 

When a car accident claim exceeds the auto insurance limits, the insured driver's insurance coverage is not enough to pay for the damages caused by an accident. This can be difficult for the driver and other involved parties, as they may be left with a hefty bill to pay.

This article will discuss what happens when a car accident claim exceeds the insurance limits.

UIM Coverage And Auto Accident Settlements

UIM Coverage And Auto Accident Settlements

UIM (Underinsured Motorist) insurance coverage can provide financial protection if you are injured in an accident caused by an underinsured driver.

UIM insurance is designed to pay for damages that are more than the other driver's liability insurance coverage limits. This type of coverage is essential, as it can help to protect you from financial hardship if you are injured in an accident caused by an underinsured driver.

UIM insurance coverage is essentially a form of protection for you, the insured, if the other driver in an accident does not have enough liability insurance coverage to cover your damages.

Suppose you are injured in an accident caused by an underinsured motorist. In that case, UIM coverage will cover the difference between the other driver's liability coverage limits and the total amount of your damages. 

For example, if the other driver has a liability limit of $25,000 and you have damages totaling $50,000, UIM coverage would cover the additional $25,000 to make up the difference.

Collect injury compensation beyond the insurance limits in car accident lawsuits.

For situations when a person needs to collect injury compensation from the insurance limits of the at-fault driver's liability policy, there are four approaches they may use:

  • Recover the amount through Underinsured Motorist insurance coverage
  • Ask the driver at fault to use their assets to pay
  • Have a trial verdict decide the excess of the at-fault driver's insurance and seize the driver's property
  • File a bad faith lawsuit against the insurance company for failing to properly protect their insured and settle the case within policy limits

When settlements from auto accidents exceed insurance limitations, the driver's property is ordered to be seized.

In a judgment lien, a court judgment will be given to the at-fault driver. Here, the court will obtain and record a property owned by the at-fault driver at any time. If the amount is insufficient, the court will also hand out orders to seize any "after-acquired property."

A judgment lien also prevents the at-fault driver from selling the property himself. The judgment lien will be attached to the property title and will hinder any sale.


Ensure You Receive Maximum Car Accident Settlement

Obtaining a maximum car accident settlement can be complicated and confusing. Here are some tips to help ensure that you receive the maximum settlement you are entitled to.

Document Everything

Document everything related to the accident, including the other driver's contact and insurance information, pictures of the scene, all medical expenses, and lost wages.

Seek Medical Attention

Serious injuries often do not manifest themselves until days or weeks after an accident. Going to the doctor and documenting your injuries will be critical in obtaining a maximum settlement.

Hire an Experienced Auto Accident Attorney

An experienced car accident attorney can help you navigate the legal system and maximize your settlement. They will be able to help you understand the process and ensure that your rights are protected.

To help you find the best one, here are some factors to look into:

  • Reputation: Look for reviews and testimonials from past clients. This will give you an idea of how the attorney has handled cases in the past. 
  • Availability: If they cannot make themselves available when you need them, they may not be the right attorney for your case. 
  • Cost: Discuss the fees associated with the attorney before you decide to hire them. Make sure that you understand the fees before you sign any contracts. 
  • Local Knowledge: An auto accident attorney with local knowledge will better understand the laws in your state and how they may impact your case. 

Types Of Injuries Parts Of Settlements For Auto Accidents That Exceed Policy Limits

Types Of Injuries Parts Of Settlements For Auto Accidents That Exceed Policy Limits

Auto accidents can cause various injuries, some of which can exceed policy limits and result in significant expenses. Common types of injuries that can exceed policy limits include the following:

Traumatic Brain Injuries

Traumatic brain injuries can be caused by blunt force trauma to the head, such as when the head strikes a windshield or dashboard in a car accident. These injuries can cause permanent damage, including loss of cognitive functioning, physical mobility, and other significant impairments. 

Spinal Cord Injuries To The Lumbar And Cervical Spine

These can occur when a person's neck or back is twisted or compressed in a car accident. Depending on the severity of the injury, it can cause paralysis, loss of feeling, and even permanent disability.

Catastrophic Injuries

Catastrophic injuries result in long-term or permanent disability. These can include amputation, paraplegia, quadriplegia, brain damage, and other serious injuries. The costs associated with treating these types of injuries can far exceed policy limits, leaving the person with significant medical expenses. 


Frequently Asked Questions

Learn more about car accident claims exceeding insurance limits through these frequently asked questions.

1. How much does insurance go down with no claims?

If you're a safe driver, you should start seeing a decrease every time you renew your policy. The exact amount that goes down varies and depends on multiple factors.

2. Do insurance companies not ever pay out?

It is rare for car insurance companies not to pay out. However, it's up to the driver to know what's covered and what is not to ensure that their claims will be paid out when the time comes.

3. Do I have to spend all the money on an insurance claim?

You can do whatever you want with the claim money you receive from your insurer, including keeping any leftover money from your claim.

4. Can I get more money than the insurance policy?

You cannot make an insurance company pay beyond its policy limit. However, you can file a demand letter if you deem that the insurer calculated the pay in bad faith. You may also sue the at-fault driver for more than the value of his or her insurance policy.

5. What is the maximum an insurance company will pay for a claim?

Every auto insurance policy has a maximum liability limit for the insurance company. The exact amount depends on the insurance provider and the plan the person decides to avail of.


Having a car accident can be both physically and financially traumatic. Being involved in a car accident can mean expensive medical bills, lost wages, and a total disruption of your life.

Fortunately, if another driver's negligence caused the accident, you may be entitled to a settlement to help cover your losses. Talk to an expert auto accident attorney and get help handling the claim process.

Learn more about finding a reliable lawyer for your auto accident in this guide from Disability Help!

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Cheri Hermanson
Cheri leads our team of writers in producing the best quality content there is regarding society and disability, most especially those that helps ease the quality of life for our differently-abled loved ones.
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