Car Accident Above Insurance Coverage Limits? Here’s What You Need to Know
A surprising fact: about 4% of auto accident claims go beyond insurance coverage limits. This happens more than you might think, particularly in states like North Carolina. Accident damages that exceed insurance coverage can put victims in a tough spot both legally and financially.
Auto insurance coverage limits typically come with separate amounts for bodily injury and property damage. To cite an instance, see a standard policy that offers $30,000 per injured person, $60,000 total per accident for injuries, and $25,000 for property damage. The insurance company pays only up to the policy maximum if car insurance coverage limits are exceeded. You might need to pay the rest.
This piece explores claims that go beyond coverage limits and your options in such situations. You’ll learn ways to protect yourself before an accident happens. The right car insurance coverage limits mean more than just meeting legal requirements – they protect your financial future.
Understanding auto insurance coverage limits
Auto insurance coverage limits show the maximum amount your insurance company will pay when you make a claim. These limits appear as three numbers (like 25/50/25). This format might look confusing at first, but it’s actually simple to understand.
Let’s break down what these numbers mean. The first number shows bodily injury coverage per person. The second tells you the total bodily injury coverage per accident. The third reveals property damage coverage per accident. A 100/300/50 policy means your insurance covers up to $100,000 for each injured person, $300,000 total for all injuries in one accident, and $50,000 for property damage.
Drivers must carry minimum liability coverage in almost every state. These minimums vary by a lot between states. State-required minimums fall nowhere near what you need to cover real-life accident costs. Massachusetts only asks for $5,000 in property damage liability. Florida requires just $10,000 in bodily injury liability.
The numbers paint a clear picture. The average bodily injury liability claim in 2023 reached $26,501. This amount already exceeds minimum requirements in many states. Medical bills from serious accidents that need hospitalization can jump to $50,000 or maybe even $100,000.
Most insurance professionals suggest liability limits of at least 100/300/100. The National Association of Insurance Commissioners advises buying enough coverage to protect your assets if someone sues you. A smart way to decide your coverage is to add up your net worth (home value + vehicles + savings + investments – debt). Your liability coverage should match or exceed this amount.
Note that you stay legally responsible for all damages you cause in an accident, whatever your coverage limits. Your personal assets could be at risk through garnishments or property liens once your policy limits run out. This includes your home, savings, and future wages.
Higher limits mean bigger premiums, but the cost difference between minimum and recommended coverage might surprise you. It often costs just a couple of lattes per month.
Options if your damages exceed insurance limits
People often discover that damages go beyond their insurance coverage limits. The at-fault driver’s policy might not cover all your medical bills, property damage, and other losses. You still have several ways to protect your finances.
Your own Uninsured/Underinsured Motorist (UM/UIM) coverage could be your first option. This protection helps when the at-fault driver’s insurance doesn’t cover everything. UM/UIM coverage makes up the difference between their policy limit and your total damages. Some states set minimum liability limits for bodily injury as low as $15,000. This is a big deal as it means that medical bills from a serious accident can quickly go beyond that amount.
Personal Injury Protection (PIP) gives you another way to recover costs. PIP covers up to $10,000 in medical costs whatever caused the accident in no-fault states like Florida. Medical Payments coverage (Med Pay) also helps cover medical expenses for you and your passengers whatever caused the accident.
You can file a personal injury lawsuit against the at-fault driver if insurance options run out. This lets you seek payment from their personal assets. You can maximize your compensation by identifying all possible defendants. Multiple parties might share responsibility in some accidents:
- The driver’s employer could be liable if they were working
- Vehicle manufacturers might be responsible for defects
- Government agencies could be liable for poorly managed roads
Not sure where to begin? ConsumerShield will connect you with a lawyer who understands your exact situation and help you take the next steps with confidence. Your attorney will negotiate with medical providers to lower bills or set up payment plans as a last resort. They can also handle medical liens from health insurance providers who want repayment.
Note that drivers usually match their uninsured and underinsured motorist limits with their liability limits. So having strong coverage before an accident happens gives you the best protection when damages go beyond standard insurance limits.
How to protect yourself before an accident happens
Your strongest defense against financial catastrophe lies in preparation, especially with car accidents and insurance coverage limits. Smart steps today can protect you from major stress and financial hardship tomorrow.
Adding umbrella insurance to your coverage portfolio makes sense. This additional liability policy activates after your auto or homeowners insurance hits its limits and provides extra protection of $1 million or more. In fact, umbrella coverage costs about $383 annually for $1 million in protection. That’s a small investment compared to the potential financial devastation of an underinsured accident.
Umbrella insurance protects you beyond standard policies. It has coverage for libel, slander, defamation of character, and invasion of privacy. Your umbrella policy could help cover both damages and legal expenses if your teenager makes an ill-advised comment online that leads to a lawsuit.
You should know your current insurance policy details before buying additional coverage. Review with your agent exactly what damages are covered and what out-of-pocket expenses you might face. This knowledge helps avoid surprises during the claims process.
Keep an emergency information packet in your vehicle’s glovebox with:
- Emergency contact details
- Medical history information
- Insurance policy numbers
- Current medications
This documentation helps first responders deliver better care if you’re incapacitated during an accident.
Watch your social media presence along with these protective measures. Insurance companies and opposing attorneys often check social media accounts during claims investigations. Simple posts can be misinterpreted and used against you. Don’t discuss accident details, post photos that could contradict injury claims, or accept friend requests from strangers.
In spite of that, adequate coverage before an accident occurs remains your best protection. Experts suggest buying enough liability insurance to protect what you could lose in a lawsuit.
Conclusion
Life gets much more complex after a car accident when damages go beyond what insurance will cover. This piece shows how standard coverage limits don’t cut it when serious crashes happen. State minimums are nowhere near enough to handle real-life accident costs, and the average bodily injury claim now tops $26,000.
Your best defense is taking action before anything happens. Higher liability limits are a vital financial safety net that costs just a bit more. Umbrella policies are a great way to get extra protection, giving you $1 million or more in coverage for about $383 a year.
You have several options if damages go beyond your available coverage. Your own UM/UIM coverage can help bridge the gap between what the at-fault driver’s insurance pays and your actual damages. Personal Injury Protection and Medical Payments coverage add extra layers of protection whatever caused the accident.
Not having enough coverage can hurt you financially for years, maybe even decades. Once policy limits run out, your personal assets become targets. This includes your home, savings, and future wages.
Nobody wants to deal with a serious accident, but being prepared helps protect you. Look at your current coverage today. Think over raising your liability limits and adding umbrella protection. The peace of mind you get from proper coverage is worth way more than the small bump in premiums. Protecting your financial future goes beyond meeting legal minimums – one unfortunate event shouldn’t wreck your entire financial life.
