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What Happens When a Car Accident Exceeds Insurance Limits?

When you are in a car accident, immediately exchange insurance information with the other driver if you can physically do so. If you need emergency medical care, the police report will contain this information.

While you have the other driver’s contact information and the name of their insurance company, you may not know how much coverage they have. If you ask, the other driver may not tell you because they know it can mean legal trouble for them (especially if they were obviously at fault for the accident).

State laws require drivers to have auto insurance as a condition for getting on the road. If the driver is uninsured, they are not only taking a large personal risk, but they also break the law. Not having adequate insurance can also cause complications when you seek compensation for your injuries and losses.

Always discuss your situation with a Denver car accident lawyer who can assess your options for maximum coverage.

You May Learn That the Driver Did Not Have Enough Coverage

At some point in the process, your lawyer can find out how much coverage the driver has. They may have to work to determine the amount of coverage that the other driver has and may learn it months after the crash.

Unfortunately, their coverage might not pay your medical bills and other losses.

Statutory Minimums Are the Bare Minimum

Many states allow motorists to get on the road with the barest insurance policies. The other driver may have little as $20,000 in coverage. States do not want to make it impossible for drivers to afford car insurance and comply with the law, but they do not necessarily think about you and other accident victims.

These statutory minimums may have gone decades without updating, even though inflation has made medical care far more expensive. You might have run through the other driver’s coverage with an overnight hospital stay, leaving nothing left to cover your ongoing medical costs, lost income and pain and suffering.

The average hospital stay costs around $15,000, not even including surgery. Medical bills for severe injuries can easily reach into the hundreds of thousands or more.

The Liable Driver Is Not Concerned About Consequences

When they purchase their coverage, the other driver is not thinking ahead about what may happen if they cause a severe accident and injuries. They do not appreciate or understand that they can be personally liable, or they may not care.

They are just doing whatever they have to to get on the road while remaining within their limited budget or saving some money. They know they need insurance, but the question is how little they have to pay for this expense because the other costs of operating a car are also high (such as gasoline and maintenance).

You Can Get Coverage from Your Own Car Insurance Policy

Experience Lawyers for Car Accidents & claim queries in Denver Co area

Thankfully, the answer is not always that you are stuck covering the rest of the costs yourself. There is a legal solution to the issue, and that is your underinsured motorist (UIM) coverage.

UIM is a crucial part of every insurance policy, yet you have to pay for this coverage. While it might not seem right that you must pay premiums to protect yourself when other drivers fall short, this is the way insurance works.

Hopefully, you have coverage for accidents with an uninsured or underinsured motorist. Under the laws of every state, a car insurance company is legally obligated to offer you this coverage along with your policies.

Sometimes, this coverage is not a part of your base policy, and you must choose to purchase it. Either way, you cannot afford to be without UM/UIM coverage. You may need it, as many drivers carry limited auto coverage.

Experts recommend you have the same amount of UIM coverage as you do for your liability. You cannot accurately predict the financial decisions that other drivers make or whether the driver who hits you will have adequate coverage.

You purchase this for your own protection, and you hope you never need to use it. Many people try to save money by foregoing UIM coverage, only to regret it later when it costs them much more in injury-related losses.

You May Need to Rely on Your Coverage in Any Serious Accident

People often think of UIM coverage as paying the balance when the other driver skimps on coverage. Underinsurance is not necessarily a function of the coverage amount that the driver purchased – it can also relate to the severity of the accident.

Even if the other driver had an extensive insurance policy, it may still not be enough to cover your damages fully. They can have several hundred thousand dollars in liability coverage that will still not fully pay a wrongful death claim worth $1 million or more.

The driver may not have been cheap – they may just have caused significant injury and damages that even a larger policy will not cover.

Then, your insurance company will be the one who is responsible for paying for the rest of your damages. Your insurance company must pay you up to the policy limits for your purchased coverage when your damages warrant it. The insurance company will need to pay for all your damages, not just medical bills and property damage, just as they should for any car accident.

Damages in a Car Accident Case

In a car accident case, your damages will include:

  • Medical bills
  • Pain and suffering
  • Property damages
  • Lost income
  • Loss of enjoyment of life
  • Emotional distress
  • Scarring and disfigurement
  • Embarrassment and humiliation

There Is More than One Insurance Company in the Picture

When you are in an accident with an underinsured motorist, you will be dealing with two insurance companies. The driver’s insurance company can dispute liability in your case, especially because they do not want to pay you up to the policy maximum.

Your own insurance company has its own financial motivations. Even though you have been a loyal customer for years, believing everything that your car insurance company tells you, it means nothing when it comes time for them to pay a claim.

You still need to fight your insurance company like you might stand up to the other driver’s carrier. Your insurance company may even deny your claim in the first place, trying to pin the accident on you because they know it will cost them money.

Full and Fair Compensation Is Far from Automatic

Even when you can prove no fault in the accident, you might have to go to some lengths to get the money you deserve from your insurance company. You will not get a reasonable settlement offer at first. You may not even receive a fair offer for months. Along the way, your attorney will need to put pressure on the insurance company to pay you.

Here, what will motivate the insurance company is fear of a lawsuit. If you threaten them with taking your business away unless they fully pay you, they will likely tell you, “Do what you have to do.”

What is more important to the insurance company is avoiding paying a large claim. Hiring an attorney is your way of holding an insurance company accountable for the games they play in the claims process.

You Can Negotiate and Even Sue When Necessary

Your attorney will still need to reject offers that do not fully pay you for your damages. They will counter your demands based on what you believe you are due for the injury. You can still expect a lengthy negotiation process when dealing with your provider.

You can sue your insurance company, and you should sue your insurance company if they are trying to get out of what they promised to do in your policy. Every policy is a contract, and your insurance company has an obligation to pay damages in a UM/UIM crash. They owe you this money, as much as they do not want to pay it. You will need to fight to get it from them.

There Is the Potential That the Driver Would Personally Pay

Even after you exhaust both insurance coverages, they may not cover all of your expenses. You could have suffered severe injuries, and the available insurance does not cover you. At that point, you may wonder whether you can do anything further to recover what you deserve.

Legally, the other driver should pay you the difference between your damages and what insurance may cover. You can sue the other driver and hold them personally liable to you.

If you win your case, you will get a judgment against the other driver you can enforce. State laws vary regarding how long you have to collect as a judgment creditor and the measures you can take to seize the other driver’s assets. You may never see a penny of the judgment.

Your Lawyer Should Research the Other Driver

Practically, lawyers may tell you that you are wasting your time if you tried to sue a driver who did not even have the money to pay for car insurance. They will tell you there is little chance you can recover money from the driver. State law will allow the driver to protect a certain amount of their assets from a judgment, and they may not have anything else that will make it worthwhile for you to sue.

Before reaching that conclusion, your lawyer can often run asset checks on the driver to determine what they have to pay for a judgment. Perhaps their car insurance merely lapsed or they have simply renewed the same minimal policy they’ve had for years, despite economic growth. You never know until someone does the research.

While this prospect is a long shot, have your attorney put in the effort before you decide on a course of action. Ruling something out before you even know what is possible can cost you.

In some states, you may even garnish the driver’s income up to a certain amount in the future. Then, you will at least receive something for your injuries. Garnishment depends on state laws, and some states do or do not allow it for judgment creditors (which you have become).

This is a complex situation, and you need to weigh every possible option with your car accident attorney.

You Need a Lawyer in Any Car Accident Case

Either way, you need legal help to help you determine your options. Never reach any conclusions on your own based on assumptions.

If you have read online that you cannot get money from a driver personally – you should not assume anything until you conclusively know it. Your lawyer will tell you whether you have any pathway to financial compensation after reviewing your case and researching the driver and the assets they may have.

If your lawyer takes your case, they believe you can get some money. Since your lawyer works for you on a contingency basis, they will waste their time if they recover no compensation.

Since you are not paying for a lawyer upfront, and they offer free initial consultations, check with an experienced personal injury attorney in Denver to learn more about your options. If you are dealing with insurance companies, you will need a lawyer’s help. Otherwise, you must deal with a complex process on your own when everyone else wants to do everything they can to avoid paying you what they owe.

Lauren Varner, Personal Injury Attorney

Lauren is a Personal Injury Attorney. She is Colorado native who became involved with the field of personal injury long before she became an attorney. Lauren’s professional philosophy centers around good old fashioned hard work, producing quality work product, and treating others professionally, with dignity and respect at all times.

Awards and as featured on

National Trial Lawyers Top 40 Under 40 Included in TOP 40 Under 40 by The National TRIAL Lawyers in Centennial CO Varner Faddis Top Lawyers Denver Badge – 5280 Magazine American Institute of Personal Injury Attorneys 10 Best Attorney Top 40 Under 40 5280 Denver Top Lawyers
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