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How Often Do Auto Accident Settlements Exceed Insurance Policy Limits?

If you sustained serious injuries in a car accident caused by someone else’s negligence, you have a legal right to collect compensation, or damages, from the at-fault party. These damages cover medical expenses, lost earnings, diminished capacity to work, and other losses both tangible and intangible. However, you may be wondering what happens when the dollar amount of your losses surpasses the insurance payout available through the at-fault party’s policy.

It is uncommon for the actual settlement amount to exceed that limit, but under certain circumstances you may be able to rely on alternative sources of recovery. An auto accident claim lawyer can help you identify these sources and collect compensation beyond the maximum amount stipulated in the policy.

Policy Limits in Car Accident Insurance Claim Settlements

Texas requires every driver to carry liability insurance with least $30,000 in injury coverage per person and up to $60,000 in injury coverage per accident. Unless the at-fault driver has obtained coverage with a higher limit, this is the highest amount their insurance provider is obligated to pay — even if your losses exceed that amount.

Potential Alternative Sources of Recovery

With realistic expectations in mind, you and your lawyer may be able to proceed in collecting damages from other sources such as the following:

  • A third party’s insurance policy. If the person who struck you was on the job at the time of the accident, you may be able to tap into their employer’s insurance policy. Employers can be held vicariously liable for their employees’ negligent acts, and employers often have more resources than their individual employees. This often includes larger insurance policies.
  • Assets of the defendant. You may be able to collect on the at-fault party’s assets, but it’s important to be realistic about this option; usually a person’s insurance amount correlates with what they stand to lose, which means it’s uncommon for someone to have assets beyond the amount of their insurance policy. Additionally, Texas provides ample protection against claiming someone else’s assets like a homestead and car, and net worth discovery laws in the state tend to hamper the ability to predict or learn more about financial status.
    Finding out what other assets you can pursue can be burdensome, but an experienced auto accident claim lawyer will do their due diligence before advising you to settle for an insurance policy. Before agreeing to a set policy limit, your lawyer may work with the at-fault party and their insurance company to secure an Affidavit of No Assets, meaning the other party must swear that there are no other insurance policies or assets that can be collected.
  • Umbrella insurance. People who possess assets that they want to protect may invest in an extra insurance policy, which comes into play when the primary policy has reached its limit. In order to obtain an umbrella insurance policy, the holder must already have homeowners, auto, or watercraft insurance, and it can only be used once this underlying coverage is exhausted.
  • Underinsured and uninsured motorist coverage. If none of these options are on the table, you may need to rely on your own underinsured/uninsured motorist (UM) coverage. If you were struck by a driver who has no liability insurance, or whose insurance payout limit is insufficient, UM can help cover your medical bills, lost wages, and pain and suffering. The other person’s insurance and available assets will need to be exhausted before your UM coverage becomes relevant.
  • Stowers demand doctrine. Unfortunately, it is fairly common for insurers to negligently fail to pay; fortunately, there is a legal remedy for that. If you’ve made a proper demand on the insurance company within the policy amount, they have a duty to act in good faith according to the Stowers doctrine. If they fail to pay, they could be on the hook for the entire policy amount and even an amount in excess of it.

How the Auto Accident Claim Lawyers at FVF Can Help

In summary, it’s not common to get paid beyond a person’s insurance policy, but it’s important to know what your other options are. An experienced and knowledgeable lawyer will do their due diligence before they ask a client to relinquish their legal rights.

At FVF Law, we set out to be transparent and informative, which is why we offer free, no-commitment case evaluations.

You do not have to navigate your car accident insurance claim settlement alone. We are here to offer critical support, guidance, and advocacy so that you can confidently move forward with your case and maximize your financial recovery. Contact us today to schedule your free case consultation with our expert auto accident claim lawyers.



Fogelman & Von Flatern is a personal injury law firm that believes it matters why we practice law: to make sure good people in unfair circumstances who want reasonable options are taken seriously, especially by their attorney. We value transparency, compassion, and justice, and we strive to embody that in our practice. At FVF, you can trust that you've got the best people on your case, for the right reasons.

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