Even though insurance companies assume responsibility for damages and injuries, keep in mind that they usually pay out to the policy limits. With that being said, you have to understand how an insurance policy limit works and if it’s possible to collect compensation above that limit.
How Does and Insurance Policy Limit Work?
An insurance policy limit refers to the maximum amount an insurance company can compensate you. For instance, if your car insurance policy is set at $100,000, then the car insurer will pay out a maximum of that amount if you get into an accident. If a judge awards you more than $100, 000 then the excess $50, 000 will have to come from somewhere else.
Is it Possible to Collect Excess Damages?
The short answer is yes you can. Let’s look at the different ways in which this can be made possible.
You Can Sue Additional Defendants
There are instances where more than one party can be held responsible for your injuries. So for example let’s say two parties were responsible for your injuries and each of them had a policy limit of $100, 000 each. If your damages are worth $200, 000, then both of their policies will satisfy your settlement.
Examples of personal injury cases that might include multiple defendants include:
Vicarious Liability Cases
An example here would be a workers’ compensation case whereby if an employee suffers a work related accident while on the clock the employer will assume responsibility for the employee’s negligence.
Product Liability
If you got into a car accident and it turns out that the brakes were defective, then you might have a case against the manufacturer and distributor of the car.
Medical Malpractice
There are instance where you can file a case against your health care giver, the hospital and any other person that owed you duty of care as a patient.
What is an Umbrella Policy?
An umbrella policy is a liability insurance policy that covers claims in excess of the original policy limits. So for example if you had an auto insurance policy of $100, 000 and an umbrella policy of $50, 000, your original policy would pay the $100, 000 and then the umbrella policy would kick in if the damages exceed the amount covered in the original policy.
Businesses and corporate entities usually take up umbrella policies but some individuals also do. So it’s always a good idea to research and find out all the insurance policies that the person responsible for your accident may have.
You Can Collect from the Defendant
If your damages exceed the defendant’s policy limit, you might have to collect the excess amount from them directly. This presents a huge challenge because the defendant might not be financially able to compensate you from their own pocket.
The good news is you might be able to get a judge to order wage garnishment or to place a lien on their property. The bad news is the defendant might not have property or a source of income.
The Insurance Company Might Act in Bad Faith
Some insurance companies can deny claims for settlement amounts that are within the policy limits. If your insurer acts in bad faith, the court might decide to hold them liable for the full amount of damages even if they are in excess of what’s owed to you.
However, it’s very rare for an insurer to deny a claim without a valid reason. For instance, you might have a valid claim but your settlement amount is unreasonable. You might have gotten into an accident and only suffered a busted lip that required a few stitches but you are asking for thousands of dollars as compensation. If an insurance company denies your claim in such a situation then they wouldn’t be acting in bad faith.
An Experienced Personal Injury Lawyer Can Help
If you were involved in an accident that led to serious injuries and you are not able to recover more than your maximum insurance policy limit, we can review your case to see how we can help. In some instances, there might be more than one person that should be held liable for your injuries or the defendant might have more than one insurance cover. We are open 24/7 and we offer free initial consultations. If you live in the Providence, RI, area, give us a call at 401-751-0101 to schedule your free initial consultation.
