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​What Happens When a Car Accident Claim Exceeds Insurance Limits?

Car insurance exists to protect injured drivers and passengers after a crash. However, insurance companies will not pay more for a claim than the limits of the at-fault party’s policy. State-established minimum limits are usually between $15,000 and $30,000 per person per accident, but severe crashes can cost injured parties hundreds of thousands of dollars. This fact raises an obvious question: What happens when a car accident claim exceeds the limits of the at-fault driver’s policy?

If you have sustained significant injuries in a car accident and your claim exceeds the other driver’s insurance limits, contact an attorney right away. A car accident lawyer can evaluate your case, explain your options for recovering additional compensation, and help you find the best path forward. Keep reading for more information on auto insurance policy limits and how they can affect your financial recovery after a car accident.

Why Do Auto Insurance Policies Have Coverage Limits?

Given how destructive and costly car accidents can be, you might hope that insurance companies would cover the full extent of the harm their policyholders cause. After all, the purpose of car insurance is to help injured drivers and passengers pay for their injuries and damaged property after a crash.

Unfortunately for accident victims, auto insurance companies are for-profit enterprises that make money by taking in more in premiums than they expend by paying claims. In other words, they won’t offer an injured claimant a penny more than they have to according to the terms of their contract with the policyholder. While this fact certainly makes sense for their shareholders, these policy limits can create significant headaches for drivers and passengers trying to take care of themselves after a crash.

How Auto Insurance Works in Florida

Florida is one of a dozen states to follow a no-fault insurance system. According to the Department of Highway Safety and Motor Vehicles (FLHSMV), anyone with a car registered in Florida must have $10,000 in no-fault Personal Injury Protection (PIP) coverage and $10,000 in property damage liability (PDL) coverage.

If you sustain injuries from a car accident, you can use your PIP benefits to pay for your injuries, no matter who caused the crash. PIP benefits cover up to 80 percent of your medical expenses and 60 percent of lost wages after a crash. The PDL coverage pays for the damage you cause others.

If your injuries from a car accident add up to more than $10,000, your options for recovering compensation depend on who caused the crash and how severe your injuries are. If you caused the crash, your insurer should cover your injuries up to the limits of your policy, though you may have to pay a deductible before they approve your claim.

The process works differently if the other driver caused the crash. In this case, you are still responsible for your medical bills as they accumulate, and your insurance company will cover them according to the terms and limits of your policy. However, you can file an insurance claim or personal injury lawsuit against the other driver, provided you meet certain requirements established by Florida’s no-fault insurance laws.

Under these laws, you cannot file an insurance claim or personal injury lawsuit against another driver unless you can show you suffered severe injuries in the crash.

Some injuries that meet the requirements to file an insurance claim or lawsuit include:

  • Any injury that causes severe disfigurement
  • Any injury that permanently limits your use of a bodily organ or member
  • Any injury that significantly limits your use of a bodily system or function
  • Any injury that leaves you fully or substantially disabled

If the other driver’s insurer approves your claim, it will cover your losses up to the policy limits. Generally, your insurer will want to recover any money they spent on your injuries before you receive any compensation. Insurance companies call this process subrogation. Once the subrogation process is complete, any remaining compensation goes to you and your lawyer, whose fee is likely based on a percentage of the recovery.

The Basics Steps in a Car Accident Settlement

Having a working knowledge of the car accident settlement process can help you figure out your next step if your claim exceeds the limits of the other driver’s insurance policy. The basic steps in a typical car accident settlement are as follows.

Initial Investigation

After starting medical treatment and hiring a car accident lawyer, your lawyer will investigate the crash.

They will look for evidence to bolster your version of events, which might include:

  • Police accident reports
  • Eyewitness accounts
  • Photos from the crash scene
  • Traffic or security camera footage
  • Forensic accident investigations

Your attorney’s goal is to determine how the crash happened and who you can hold responsible for your injuries.

Identifying Liable Parties

Before you can file an insurance claim or lawsuit, you need to know who caused your injuries and is therefore liable for them, a legal term meaning responsible. Using the evidence from their initial investigation, your car accident lawyer can tell you if another driver is liable for your injuries and if anyone else contributed to the crash.

For example, the company that made your car could be partly liable if the collision occurred due to a mechanical defect, while a government entity could share the blame if poor road maintenance contributed to the crash.

Documenting Your Injuries

An insurance claim’s purpose is to compensate you for the harm you suffered in the crash. To this end, you need evidence of your injuries and financial losses. The more detailed your records, the easier it will be to convince an insurance company to approve your claim. Your lawyer can use your medical records, pay stubs, repair estimates, expert testimony, and other evidence to substantiate an insurance claim or personal injury lawsuit.

Filing an Insurance Claim

Next, your car accident attorney will send a demand letter to the insurer laying out your case against the other driver and how much you are asking for in compensation. The demand letter serves as the starting point for settlement negotiations.

Settlement Negotiations

No insurer wants to pay more for a claim than it absolutely has to. After you and your attorney submit your demand letter, the insurance adjuster and your lawyer will begin negotiations over a potential settlement. These negotiations can take a while, but patience is the key to recovering maximum compensation.

Remember, you typically cannot recover additional compensation after accepting a settlement, so you must ensure the offer meets your needs, not just for now but for the future. Also, remember that an insurance company usually has no obligation to pay more for a claim than the limits of the other driver’s policy.

Accepting an Offer or Preparing for Trial

At this point, one of two things will happen with your insurance claim. If your attorney can negotiate a fair deal with the insurance company, you will sign the agreement, ending your claim. But if the insurance company will not negotiate in good faith or your claim exceeds the other driver’s policy limits, you will need to file a lawsuit to recover the money you need. If you file a lawsuit, your case will proceed to the following steps.


In a civil case, discovery is the process in which both sides of a lawsuit exchange the evidence they have gathered and narrow the scope of the issue. In a complex car accident case, it could take a while for both sides to review all the evidence before the case can proceed.


While mediation is not required, judges often ask the sides to meet with a professional mediator to see if they can resolve the issue without a trial. Getting out of a courtroom can make negotiations easier and allow both sides to find common ground. It also relieves some of the burden placed on the court system.


If mediation fails, then it is time for a civil trial. A trial should be the last resort in a personal injury case, as they take a long time and are inherently unpredictable. Some civil cases involve juries, though if both sides agree to it, a judge can make the determination alone. If you win your trial, the judge or jury will determine the value of your compensation. If the other driver wins, you will not recover any money, though you could appeal the decision.

How to Recover Additional Compensation If an Insurance Claim Exceeds the Policy’s Limits

If you file an insurance claim that exceeds the other driver’s policy limits, you have a few options for recovering additional compensation.

Filing Claims with the At-Fault Driver’s Other Insurance Policies

Some drivers have a supplemental insurance policy if they cause losses beyond what their standard policy covers. The insurance industry calls these policies “umbrella policies.” If the other driver has an umbrella policy, you can file another claim to pursue more compensation.

Filing a Lawsuit Against the Driver

If the other driver’s insurance policy does not cover all your losses, you can file a lawsuit and go after the other driver’s personal property. However, drivers with low policy limits typically do not have many assets you can seize in a lawsuit.

Pursuing Claims with Additional Defendants

You may file an insurance claim against anyone who contributed to your injuries in a car accident. If the other driver’s insurance is not enough to cover your losses, you can file a claim against another party and their company. For instance, a second driver might have contributed to the crash, or an automaker might be partly liable for your injuries if a defective part played a role.

Using Your Own Insurance Coverage

You can use your insurance coverage to pay for your injuries after an accident. However, you may have to pay a deductible or a percentage of your medical bills. In addition to your PIP benefits, your policy may include medical payments coverage you can use.

If you have uninsured or underinsured motorist coverage, you can use that coverage to bridge the gap between the other driver’s insurance and your losses. Finally, your health insurance may help you pay for medical treatment after a crash.

Potential Compensation in a Car Accident Claim

The amount you can recover after a crash depends on your injuries, your financial and intangible losses, the available insurance coverages, and the personal wealth of the at-fault party.

That said, compensation in a car accident claim can include money for:

  • Your past and future medical expenses related to the crash
  • Your lost wages
  • Your reduced earning potential due to your injuries
  • Your diminished quality of life
  • Your physical pain and emotional distress
  • Your damaged personal property

A car accident lawyer can tell you more about how much your claim might be worth. They can also explain what to do if your claim exceeds the other driver’s insurance coverage.

How to Protect Your Right to Compensation After a Car Accident

Taking the following steps after a car accident can improve your chances of recovering the compensation you need:

  • Call 911 immediately after the accident.
  • Take pictures of the crash scene, your injuries, and damage to your vehicle.
  • Look for nearby surveillance cameras and potential eyewitnesses.
  • Seek medical treatment immediately.
  • Save all your medical records and any receipts related to the accident.
  • Do not post about the accident on social media.
  • Limit your interactions with insurance companies before you meet with a lawyer.
  • Hire a car accident attorney as soon as possible.

Deadline to File a Car Accident Lawsuit in Florida

Fernandez Firm Car Accident Injury Attorney
Car Accident Lawyer, Frank Fernandez

If your losses from a car accident exceed the other driver’s insurance limits, you have a closing window in which to file a lawsuit and pursue additional compensation. Under Florida Statutes, you have four years from the accident to file suit against any at-fault parties.

Waiting too long to file a lawsuit could cost you the money you need to pay for your injuries, so speak to a lawyer soon after an accident.