Auto insurance policies are designed to cover damages after a car accident, but what happens when the costs are higher than the at-fault driver’s coverage? At the Law Offices of Brent W. Caldwell, we often help clients in California facing this exact situation, especially after serious or catastrophic injuries. If your car accident claim exceeds insurance limits, here is what you need to know.
California Minimum Auto Insurance Requirements
As of January 2025, California law requires all drivers to carry liability insurance with at least the following minimum limits:
- $30,000 for bodily injury or death per person
- $60,000 for bodily injury or death per accident
- $15,000 for property damage per accident
These limits are often too low to cover damages from a major accident, especially if someone suffers long-term injuries, requires surgery, or misses significant time from work.
What If the Claim Exceeds the At-Fault Driver’s Policy?
If the value of your damages exceeds the at-fault driver’s insurance limits, you may still be able to recover the difference through one or more of these options:
1. Underinsured Motorist Coverage (UIM)
If you have underinsured motorist coverage on your own auto policy, you can file a claim for the remaining damages not covered by the other driver’s insurance. This coverage is not required in California, but many people have it without realizing it.
2. A Personal Injury Lawsuit Against the At-Fault Driver
You can sue the at-fault driver personally for the full amount of your damages. If successful, the court may issue a judgment against them. Keep in mind that collecting on a judgment can be difficult if the person does not have significant assets or income.
3. Multiple Defendants or Third Parties
In some cases, more than one party may share liability. For example, if the at-fault driver was working at the time of the accident, their employer may be responsible. Or if a defective vehicle part contributed to the crash, a product liability claim might apply. Identifying all responsible parties can increase the available coverage.
4. Medical Payment Coverage (MedPay)
If you have MedPay as part of your policy, it can help cover your medical bills up to the policy limit, regardless of fault. This will not cover all losses but can ease the financial burden.
What Is a Policy Limit Settlement?
A policy limit settlement occurs when the at-fault driver’s insurance company agrees to pay the full amount of their available liability coverage. This often happens when your damages clearly exceed the policy limits and there is no serious dispute about liability.
If you accept a policy limit settlement, you will be required to sign a release of claims against the at-fault party. This means you cannot later sue them for additional compensation, even if your actual damages are higher than their insurance coverage.
However, you may still be able to pursue a claim through your own insurance policy if you carried underinsured motorist (UIM) coverage at the time of the accident. UIM coverage can help pay for the remaining losses that were not covered by the at-fault driver’s policy. The amount you can recover will depend on the limits of your UIM coverage and how it compares to the liability limits already paid out.
Should You Accept the Insurance Limit Offer?
It is important to speak with a personal injury lawyer before accepting a policy limit settlement. Once you sign a release, your legal options become limited. We can review your case, assess all available sources of compensation, and help ensure your long-term needs are considered.
Protecting Yourself With the Right Coverage
To avoid being stuck with unpaid damages, it is a good idea to carry underinsured and uninsured motorist coverage with limits higher than the state minimums. This helps protect you if the at-fault driver has little or no insurance and you might be surprised at just how affordable it is.
We Can Help You Recover What You Deserve
When a car accident claim exceeds insurance limits, things can quickly become complicated. At the Law Offices of Brent W. Caldwell, we understand how to navigate the legal and insurance systems in California to pursue every possible source of compensation. We offer free consultations and handle all injury cases on a contingency fee basis.
Contact us today to speak with a California personal injury attorney and learn your options.
