From the standpoint of a victim, policy limits can be a huge issue. If your injury case is worth more than the defendant’s insurance covers, getting your full damages can be challenging.
First, know that the insurance company will likely never agree to a settlement higher than the policy limit they are contracted to pay, but the defendant can agree to pay the overage. Second, you can potentially sue for more than policy limits and make the driver or another defendant pay that overage out of pocket, but only if they have the money to pay. Lastly, your own insurance policy might have additional “underinsured motorist” coverage.
For help with an auto injury case, call Schoenfeld Law Firm’s Lafayette, LA car accident lawyers at (504) 688-7760 today.
What is the State Minimum Insurance in Louisiana?
Every driver is required to carry insurance to cover the damages they cause others while driving. However, the state minimum is somewhat low:
- $15,000 per person for injuries
- $30,000 per accident for injuries
- $25,000 per accident for property damage.
This means that, if a driver has state minimum insurance, it is likely that serious car accident cases will blow past that $15,000 policy limit for injuries. If the other driver did not opt for higher policy limits, this can make getting paid more challenging.
Will the Insurance Company Pay More than Policy Limits?
An auto insurance policy is a contract between the insured driver and the insurance company. In this contract, the insurance company agrees to cover the driver’s damages up to their policy limit.
Insurance companies are not obligated to pay more than the policy limit, and they typically will not. This means that a settlement higher than the policy limit is almost impossible, unless the defendant agrees to pay that excess out of pocket.
Can the Driver Pay the Difference if the Policy Limit is Lower than the Damages?
A settlement can be made where the insurance company agrees to pay the full policy limit, and the driver agrees to pay the rest. This is somewhat common when the driver has state minimum or low-dollar coverage and essentially expects to pay some money out of pocket if they ever cause a crash.
However, you can also sue for more than policy limits if the defense does not want to settle.
Can the Defendant Afford Damages?
When suing for more than policy limits, it is always important to question whether the defendant can actually afford higher damages. If they have no money or assets, they might not be able to afford the judgment against them. This is called being “judgment proof.”
We may be able to attach and liquidate some of their assets to cover the costs, or they may have other insurance to pay you, but it is worth investigating this during settlement negotiations rather than waiting until the end to find out if they can pay you or not.
Adding Other Defendants
If one defendant can’t pay the full amount, maybe multiple defendants can.
If there were multiple drivers at fault, each can pay their fair share. Even with lower policy limits, multiple drivers may be able to combine to afford your total damages.
Companies might also be involved, and they can often afford far more than an individual can. For example, if a commercial truck driver hit you, the company they work for might be sued in their place. Auto defects might have also played a part, allowing you to join the auto manufacturer in the lawsuit.
Underinsured Motorist Coverage
In Louisiana, we have optional coverages we can add to our insurance policies to help out when the other driver has no insurance or their policy limit is too low, known as “uninsured/underinsured motorist” coverage (UM/UIM):
Full UM/UIM Coverage
If you get this optional coverage, your insurance covers you when the other driver’s insurance is too low, up to the limit on this coverage. This pays all damages for injuries, including pain and suffering.
UM/UIM Economic-Only Coverage
This works the same as full coverage, but it covers only the medical bills, lost wages, etc. It will not cover pain and suffering, but the premiums are usually cheaper.
UM/UIM Property Damage Coverage
You need this additional coverage to get vehicle damage covered. You may alternatively/additionally have collision coverage, which covers your vehicle repairs/replacement regardless of fault, and regardless of whether the other driver has no insurance or low insurance.
FAQs for Car Accidents Over Policy Limits
Can The Defendant Be Made to Pay Out of Pocket?
If the driver who hit you doesn’t have a high enough policy limit to cover the damages, that doesn’t get them off the hook. They can be made to personally pay any excess.
However, if they have no money or assets to cover the cost, putting them on a payment plan can take years or even make it impossible to collect.
What is a Policy Limit?
Every auto insurance policy has a limit, which is the upper amount the insurance company will pay. You cannot get them to pay more, so your New Orleans, LA personal injury lawyers need to find alternative sources of coverage for any damages beyond policy limits.
Can I Use My Own Insurance for Coverage?
Louisiana is an at-fault state, so we usually rely on the other driver’s insurance to cover us, but you can get these optional coverages to help out in case the other driver’s insurance is too low:
- Collision coverage – covers vehicle damage in a crash, regardless of fault.
- Medical payment coverage – covers your medical bills regardless of fault.
- Uninsured/underinsured motorist coverage – various options that cover property damage, economic damages only, or full damages if the other driver has no insurance or has low insurance.
- Comprehensive coverage – covers vehicle damage from sources other than crashes.
You typically cannot use your liability coverage to pay for your own vehicle damage when the other driver is the one at fault.
Can I Sue Someone Else, Too?
If the other driver’s insurance is too low to cover your needs, you may want to consider suing other at-fault parties for their share of damages. This spreads the burden across multiple parties, potentially increasing the odds of getting full payment.
You can often sue a commercial driver’s employer, auto manufacturers might share a portion of the blame, and governments may share responsibility if dangerous roads contributed to the accident. Multiple drivers might also share fault.
Call Our Car Accident Attorneys in Louisiana Today
To get started with a free case review, call Schoenfeld Law Firm’s Louisiana car accident lawyers at (504) 688-7760.
