If you were injured in an Appleton car crash, you may be eligible to make a claim against the driver responsible for the accident and any resulting injuries and damages. This is because Wisconsin follows a traditional fault-based system.
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In an ideal situation, this would mean getting fully compensated for all your losses. The trouble is, sometimes the amount of compensation you may be eligible to receive exceeds the at-fault driver’s insurance policy limits.
While it may be possible to sue for more compensation than the at-fault driver’s policy limits, it is not an easy task, especially without an experienced attorney by your side. Below, Sigman Janssen discusses what you need to know about insurance policy limits and the value of your claim.
Understanding Insurance Policy Limits
When a driver purchases liability insurance, they select coverage limits, which define the maximum amount an insurance company will pay out for claims made against the policyholder. These limits are crucial in determining how much compensation you can expect to receive after an accident.
What Are Insurance Policy Limits?
Insurance policy limits represent the highest amount of coverage provided by an insurance policy for a specific type of claim. These limits are set at the time of purchasing the policy and can vary based on the policyholder’s choices and the insurance company’s offerings. Policy limits typically apply to both settlements and court awards.
How Policy Limits Work
For example, if you are involved in a car accident caused by another driver, and their liability insurance policy has a bodily injury limit of $25,000 per person, this means that their insurer will pay up to $25,000 for injuries you sustained because of the accident.
This $25,000 limit generally covers:
- Medical Expenses: Costs related to hospital visits, surgeries and ongoing medical treatment.
- Loss of Income: Compensation for wages lost due to the inability to work because of your injuries.
- Other Out-of-Pocket Costs: Expenses such as rehabilitation, physical therapy or any other necessary treatments directly related to the accident.
Implications of Policy Limits
If your total damages exceed the policy limit, you may face a shortfall between what you need and what the insurance company is obligated to pay. For instance, if your damages amount to $50,000 and the at-fault driver’s insurance only covers $25,000, you would be left to recover the remaining $25,000 from other sources.
Additional Considerations
- Per-Accident vs. Per-Person Limits: Insurance policies often have both per-person and per-accident limits. For example, a policy might have a $25,000 limit per person but a $50,000 limit per accident. This means if multiple people are injured in one accident, the total payout for all claims combined cannot exceed $50,000.
- Property Damage Limits: Liability policies also include limits for property damage, which is separate from bodily injury coverage. If the accident resulted in damage to vehicles or other property, the insurance would cover these costs up to the policy’s property damage limit.
- Settlement and Verdicts: Insurance policy limits are applicable to both out-of-court settlements and jury verdicts. In settlement negotiations, the insurer will typically offer an amount up to the policy limit to resolve the claim. If the case goes to court and you win a verdict that exceeds the policy limit, the insurer will only pay up to the limit, leaving you to pursue the excess amount through other means.
Suing for More Than the Insurance Policy Limits
Unfortunately, you cannot make an insurance company pay beyond its policy limit. You do, however, have the right to sue the at-fault driver for more than the value of his or her insurance policy. This would mean directly filing a lawsuit directly against the driver who caused the accident and not the insurer.
The issue is that many drivers typically do not have the funds to cover your damages. Even if you win the case, you may not be able to collect the full amount awarded. Lawsuits can be expensive and lengthy.
In most cases, your lawyer will pursue compensation for you through negotiations with the insurance company. This might limit you if your damages exceed the policy limits, but it may be the best way unless your lawyer decides that a lawsuit would be necessary.
Other Ways to Pursue Financial Compensation
When an accident results in damages that exceed the at-fault driver’s insurance policy limits, there are additional strategies you and your lawyer can explore to help you recover the compensation you need. Here are some key options:
1. File a Claim Against an Umbrella Policy
What is an Umbrella Policy?
An umbrella policy is a type of excess liability insurance that provides additional coverage beyond the limits of the policyholder’s primary auto insurance or homeowners insurance. It’s designed to kick in when the costs of a claim exceed the coverage limits of the primary policy.
How Umbrella Policies Work
For example, if the at-fault driver in an accident has a primary auto insurance policy with a $50,000 bodily injury limit, and your damages total $100,000, the primary insurance will only cover up to $50,000. If the driver has an umbrella policy with a $1 million limit, this additional coverage can potentially pay the remaining $50,000, up to the umbrella policy’s limit.
Benefits of an Umbrella Policy
- Extended Coverage: Provides an extra layer of financial protection, which can be crucial in cases of severe injuries or substantial property damage.
- Broader Protection: Often covers more than just auto accidents, including personal injury claims and other liability issues.
Determining the Availability of Umbrella Policies
- Identify Potential Coverage: Your lawyer can help investigate whether the at-fault driver has an umbrella policy. This often involves reviewing the driver’s insurance records or legal discovery if a lawsuit is filed.
- Verify Policy Limits: Confirm the umbrella policy’s limits to understand how much additional coverage might be available.
2. Filing a Lawsuit Against Multiple Parties
What is Joint Liability?
In some accidents, multiple parties may share liability. For example, if another driver was partially at fault or if a third party, such as a vehicle manufacturer or a road maintenance company, contributed to the cause of the accident, you may be able to seek compensation from all responsible parties.
How to Pursue Multiple Defendants
- Identify Liable Parties: Work with your attorney to determine all potential parties who may be held responsible for the accident. This could include multiple drivers, companies or entities.
- File Separate Claims or a Consolidated Lawsuit: Depending on the circumstances, your lawyer might file separate claims against each party or pursue a consolidated lawsuit that addresses all responsible parties collectively.
3. Pursuing Additional Damages
If the insurance policy limits are insufficient, consider pursuing additional damages through other means:
- Personal Assets: If you win a lawsuit against the at-fault driver but the insurance limit is insufficient, you might be able to recover additional funds from the driver’s personal assets. However, this can be challenging if the driver does not have significant assets.
- Property Damage Claims: Ensure you file claims for all property damage, including vehicle repairs and other related costs. If the at-fault driver’s insurance doesn’t fully cover these costs, you might need to explore other sources of compensation.
4. Utilizing Your Own Insurance
Underinsured Motorist (UIM) Coverage
If the at-fault driver’s insurance is insufficient to cover your damages, your own auto insurance may include Underinsured Motorist (UIM) coverage. This type of coverage kicks in when the at-fault driver’s insurance falls short of covering your total damages.
How UIM Coverage Works
- Coverage Limits: UIM coverage provides additional compensation up to the limit of your own policy. For example, if you have a UIM policy with a $100,000 limit, and the at-fault driver’s insurance covers $50,000, your UIM coverage can potentially pay the remaining $50,000.
5. Exploring Other Insurance Policies
Check if you have any other insurance policies that might offer coverage for your situation. This could include:
- Health Insurance: Your health insurance may cover medical expenses related to the accident, which can help reduce out-of-pocket costs.
- Disability Insurance: If you are unable to work due to the accident, disability insurance might provide compensation for lost wages.
Get the Legal Answers You Need Today
Being able to collect more than a policy limit is sometimes possible if your injuries and damages require more compensation. A licensed Appleton car accident lawyer from our firm is prepared to review your situation, discuss your legal options and guide you throughout the legal process from start to finish.
Request a free, no-obligation consultation to see how we may be able to help. There is no obligation involved to retain our services, but if you do, we charge no fees unless you obtain compensation.
Need legal help? Call (920) 328-0700 today.