What Happens When Car Accident Claim Exceeds Insurance Limits?

What Happens When Car Accident Claim Exceeds Insurance Limits? Auto accident settlements generally do not exceed the policy limits of the defaulting driver’s liability coverage. For this to happen, it means that a jury at trial must make a verdict that exceeds the defendant’s insurance, or that the defendant has sufficient assets to settle the case above the insurance limits.

There is also the possibility of a bad faith lawsuit if an insurer fails to protect its policyholders. Subject to state law and if the case is in bad faith, the at-fault driver may assign his bad faith claim against his own insurance company to the plaintiff.

So what happens when car accident claim exceeds insurance limits? Liability insurance limits are something that many people don’t understand when they buy insurance for themselves and file a claim after an accident.

When buying your policy, it can be tempting to save money and buy only what is required by Georgia, Michigan, and Maryland laws. But reduced coverage can mean you remain vulnerable after an accident. Even if you are the most careful driver and an accident is not your fault, the lack of personal injury and property damage insurance for uninsured or underinsured motorists can put the financial burden of an accident on you. If your injuries are serious, having auto insurance can be devastating.

What is a car accident claim?

A car accident claim is a request for financial compensation after an accident. You can submit this to your own insurance company or another non-life insurance company. Claims can cover car repairs, medical expenses, lost wages, and other damages, in addition to pain and suffering. A claim can become a personal injury suit, which is filed in court if a fair settlement is not reached. It is always best to speak with a personal injury attorney before filing a claim. A lawyer can give you valuable advice on what to say and what not to say and how to preserve critical evidence.

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What Happens When Car Accident Claim Exceeds Insurance Limits?

When an auto accident insurance claim exceeds insurance limits, it generally results in one of three things: (1) the claim results in a co-payment settlement above the policy limits by the defaulting driver; (2) a jury will return an “exceeding limits” verdict against a collectible defendant; or (3) a claim or lawsuit may be filed in bad faith, subject to the specific bad faith laws of the state.

When car accident settlements exceed policy limits and a lawsuit is filed in bad faith, it means that the defaulting driver’s insurer is not reasonably settling the claim within the insurance limits, exposing their policyholders to a deductible and the defendant admits liability or your reason for acting in bad faith against the plaintiff. The plaintiff, in return, agrees not to pursue debt collection against the guilty driver.

What Happens When Car Accident Claim Exceeds Insurance Limits And The Driver’s Property Is Seized?

Confiscation of a driver’s property typically involves obtaining a judgment against the guilty driver and then obtaining a court order ordering the county sheriff to seize the driver’s “personal property” (including, but not limited to, seizing and selling motor vehicles or money, anywhere established) to pay and settle the portion of the judgment not covered by the guilty driver’s liability.

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What Happens When Car Accident Claim Exceeds Insurance Limits And A Judicial Lien Is Registered?

A judicial lien involves obtaining a judgment against the at-fault driver and then obtaining and recording a judicial lien against the at-fault driver’s property at that time and all “subsequently acquired property”. (MCL 600.2803) The judicial lien is a lien on real estate that prevents the guilty director from selling it because the attached lien does not give clear title to the real estate.

How Do You Ensure That You Get The Maximum Car Accident Settlement?

To ensure you receive the maximum amount of auto accident settlement, you must hire an experienced auto accident attorney with a track record of obtaining informed rulings and settlements and who has experience and understanding of bad faith insurance disputes. Your attorney should also perform an asset check on the defaulting driver. Finally, each attorney should investigate other potential defendants and different levels of insurance, including umbrella and supplemental insurance coverage.

Michigan’s auto law requires all drivers to have a minimum of $250,000/$500,000 in liability insurance. However, the law also gives them the option to “buy lower limits” of $50,000 and $100,000. (MCL 500.3101(1); 500.3131(2); 500.3009(1)(a) and (b), (5))

If the vehicle driven by the guilty driver who injured you was an Uber or Lyft or a truck or commercial vehicle or if the guilty driver was an employee of a company and was acting under his or her employment at the time of the accident, then the limits of liability insurance coverage that apply to your settlement will likely be higher.

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Problems When Car Accident Settlements Exceed Policy Limits

Two common problems when car accident settlements exceed the policy limit are: (1) the driver at fault has no personal property to pay out of pocket for the difference between the verdict of a lawsuit against him and the limit of his liability coverage. (2) The guilty driver is filing for bankruptcy.

In any of the scenarios where car accident settlements exceed policy limits, the accident victim could lose, whether it be because they cannot recover compensation for pain and suffering, excessive medical expenses and lost wages, and other economic losses. that he or she is legally entitled to, and for which the guilty driver is legally responsible, or because the victim of the injury is unable to collect because the guilty driver is on trial.

Types of Injuries Involved in Auto Accident Settlement Exceeding Policy Limits

The types of injuries that commonly occur in auto accident settlements that exceed the policy limits of a negligent driver causing an accident are (1) traumatic brain injury; (2) spinal cord injuries to the lumbar and cervical spine, including herniated discs and spinal surgeries; (3) catastrophic injuries.


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