If you have been in a car accident that was not your fault, the law will allow you to collect damages from the other party who was at fault. Damages can include compensation for medical bills, lost wages, and property damage. In unfortunate cases, sometimes the settlement amount for the damages exceeds the insurance policy limits. 


If you are at fault for the accident, can you encourage your insurance company to settle within policy limits?


Read along as we discuss the ins and outs of insurance policy limits and whether you can encourage your auto insurance company to settle within policy limits.


What is a policy limit?

All liability insurance comes with a policy limit of the maximum amount of money that can be paid out by the insurance company on behalf of the person who caused the damage. 


With auto accidents, in particular, exceeding the policy limit is very uncommon but it does happen every once in a while. For excess damages, the person at fault will be liable to pay this out. 


Can you be liable for excess damage if it is more than your car insurance policy limit?

Yes, you can be liable for excess damage if it exceeds your policy limit. Insurance companies tend to pay up to the policy limit but there are some cases where there are excess damages that are above the policy limit and the at-fault party will be responsible for this. 


To further understand this, it is important to take note of how the injured party can collect excess damages through:

  • Collecting damages through an umbrella policy
  • Collecting damages through the defendant
  • Filing a lawsuit against additional defendants
  • Negligence from the insurance company 


What happens when you have to pay excess damage?

Figuring in a car accident is stressful enough as it is but being partially or fully at fault will bring you stress levels like no other. If you are caught in this situation, it is easy to feel anxious about what will happen in the future. 


More often than not, car insurance companies can cover the damages up to the maximum policy limit. In cases where the total damages exceed the policy limit, you will be responsible for paying the excess as your car insurance won’t cover it.


If the accident is serious enough that it includes fatalities or severe injury to the other party, a lawsuit can be brought against you as well.


The amount of money that you will pay depends upon the severity of the other party’s injury. Damages can be from medical costs, lost wages, or damage to personal property. Whatever the price tag might be, this can cause unnecessary financial strain on you and your family. You might be forced to sell your assets to pay for the damages or take out a loan. 


If you figured in a car accident and you are at fault, your insurance rates will also skyrocket which means more money out of your pocket.


Can you encourage your car insurance to pay within the policy limit?


Every policy that involves insurance has to follow a strict process that is adhered to by car insurance companies. You can try to encourage your car insurance to pay within the policy limit but this move is not guaranteed to work at all times. 


Instead, you can hire a personal injury lawyer who can help you navigate the confusing world of insurance. A personal injury lawyer in the Central Florida area can help you with talking to your auto insurance company to see if there’s anything that they can do to decide on your favor. Lawyers are extremely well-versed in situations like these and you can lean on their expertise as needed.


It is also important to keep in mind that insurance companies are required to negotiate in good faith and there is no legally binding requirement to offer an amount that is more than the policy limit in any claim. 


If you are a party to a car accident, contact Jordan Law in Orlando today!

Being in a car accident is a scary thing especially if you are the one at fault and caused damage to other people or other people’s property. Paying excess damages that are above your car insurance’s maximum policy limit is very uncommon but not unheard of. If this situation is happening to you right now, contact Jordan Law in Orlando today!


Our team of legal professionals located in Central Florida can help you with this confusing situation and arm you with resources and knowledge so that you can be prepared. We pride ourselves in being experts when it comes to car auto insurance policies and we can hold your hand as you try to navigate through this stressful time.