Posted on Car Accidents / What Happens if I’m Sued for More than My Insurance Covers?

Page Updated 12/09/2021

What Happens if I’m Sued for More than My Insurance Covers?


When you purchase an insurance policy, it is a type of financial guarantee that an insurance company will cover your damages or losses.

However, an insurance company will only be liable for covering damages (medical bills, lost wages, and more) up to the policy limits in the insurance policy.

Sued for More Than You Have? Ehline Law is Here to Assist

Let’s look at how insurance policy limits work and what could happen if you get sued more than what your insurance covers.

Insurance Policy Limits and How They Work

Policy limits are the maximum amount an insurance provider is willing to pay from any incident that the insurance policy covers.

For example, if you have car insurance with a policy limit of $30,000, the insurer will pay for the damages of the other party up to $30,000 in an accident that you cause. However, if the damages are $50,000 then in most cases the insurer is not liable for the extra $20,000 above the policy limit on a standard car insurance policy.

Insurance Company Acting in Bad Faith

An insurance provider might deny claims within the policy limits just to ensure a healthy profit but at the end of the day, it is acting in bad faith. If an insured is agreeing on a lower settlement amount and the insurer still refuses to pay the claim without any reasonable explanation, the insured can file a lawsuit against the company for acting in bad faith.

In such lawsuits, the court and the judge will award the insured a maximum payout as a punishment towards the insurance provider for not demonstrating the duty of care.

We’ve discussed situations where you can claim more than the coverage, let’s look at the situation another way around. What happens if the other party sues you for more than your coverage?

I’m Sued for More than My Insurance Coverage

The same California insurance law applies here where insurance providers are not liable for any damages above an insured’s insurance coverage. If you were in an accident that was your fault and the auto accident settlements exceed your coverage, the company will simply deny or process payments up to the insurance policy limit.

You can expect the injured person to come after you by suing you for damages if the insurance company pay is less than their damages. This can definitely impact your reputation among your social circle and colleagues at work. However, if you don’t have any financial assets to pay, the injured person may not get their full injury compensation.

Other Ways People Pursue Compensation from Insurance Companies

If the claim exceeds policy limits, one simply can not ask the at-fault driver’s insurance provider to pay more. Because of this, the other party may take the following actions.

Use the Umbrella Policy

The other party can use umbrella policies to get additional compensation or coverage for their loss. A personal injury lawyer can guide if there are any umbrella policies or multiple insurance policies that the driver can draw benefits on.

Lawsuits Against Multiple Individuals

If your auto insurance coverage is lower than the damage done in a car accident to the other driver by yourself, then you can expect the other driver to file multiple lawsuits. An injured car accident victim can file lawsuits against multiple people if there are more people in the car accident besides the at-fault driver.

If you’re sued for more than your coverage, contact Ehline Law firm to help protect your rights. We have substantial experience dealing in personal injury cases and maintain a strong professional attorney-client relationship. Our results and achievements talk for themselves.

Contact us at (213) 596-9642 and get a free consultation with an expert attorney for legal representation today!

Citations:

Downtown Los Angeles Corporate Offices

Downtown Los Angeles Office
633 West 5th Street #2890
Los Angeles, CA 90071
(213) 596-9642
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Downtown Los Angeles Office
633 West 5th Street #2890
Los Angeles, CA 90071
(213) 596-9642
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