Even though, as a whole, people drove less in 2020 and 2021 due to the pandemic, auto accidents were unfortunately widespread. Distracted driving accounted for approximately 14% of all car accidents resulting in injuries in 2020, according to the National Highway Traffic Safety Adminstration (NHTSA). Also in 2020, over 1,100 people lost their lives due to alcohol-related car accidents in California. NHTSA estimates that in 2021, over 4,000 lost their lives in a traffic accident.
Car insurance serves to help make sure that a crash victim receives a minimum amount of compensation for their injuries and damages. But what if the damages are more than the insurance policy limit? Can an auto accident settlement exceed the policy limit in California?
California Insurance Policies and Limits
California has special laws when it comes to car insurance. By law, individuals can carry traditional motor vehicle insurance or provide proof of financial responsibility in lieu of insurance. This allows individuals flexibility to choose how they would like to cover car accident liability. Additionally, it protects the public by requiring individuals to secure a method to compensate car accident victims for losses.
Types of California Insurance Policies
California allows drivers to carry the following types of liability policies:
- Car insurance from a licensed insurance provider;
- Self-insurance certificate issued by the Department of Motor Vehicles (DMV);
- Evidence of a $35,000 deposit with the DMV; or
- $35,000 surety bond issued by a business licensed to operate in California.
Some individuals may qualify for a low-cost insurance program. This program improves access to insurance coverage to individuals who can’t afford traditional car insurance. In return, however, the policy limits and coverage are less than those of traditional insurance.
California Insurance Policy Limits
California’s drivers must provide evidence of the following minimum amounts of financial responsibility in case of an accident:
- $15,000 minimum coverage for bodily injury or death of one person in an accident;
- $30,000 minimum coverage for bodily injury or death of two or more persons in an accident; and
- $5,000 minimum coverage for damage to the property belonging to others in the accident.
If the individual carries a low-cost automobile insurance policy, the following limits apply:
- $10,000 minimum coverage for bodily injury or death of one person in an accident;
- $20,000 minimum coverage for bodily injury or death of two or more persons in an accident; and
- $3,000 minimum coverage for damage to the property belonging to others in the accident.
These are the minimum amounts of coverage that California’s drivers must carry or bear responsibility for. But drivers can opt to take out policies with higher coverage amounts.
Can an Auto Accident Settlement Exceed the Policy Limit in California?
It depends. Part of the insurance contract is that the driver agrees to pay the insurance company X amount in exchange for the insurance covering losses totaling X amount or less.
Typically, insurance policies and limits represent the highest amounts that the insurance company may agree to pay if there’s an accident.
In California, you have to give the at-fault insurance company one opportunity to resolve the claim within their limits by sending over enough information to show the limit amount should be tendered. If the insurance company disagrees and does not pay, then the insurance policy limit is open.
You can still negotiate with the insurance company and at-fault parties to reach a settlement agreement that works for everyone. Additionally, if you have underinsured motorist coverage, your insurance company may cover some of your damages.
Having an experienced auto accident lawyer to help you increases your chances of recovering. The Beliz Law Firm helps people like you negotiate with the insurance company. We’re not afraid to go to court to help victims and their families get the compensation they need and deserve.
What Are My Options If My Damages Exceed the Insurance Policy Limits?
Some car accident injuries like traumatic brain injury can incur a lifetime cost for medical treatment of thousands to over $1 million dollars. Aside from medical costs, you or your loved one may be missing out on wages, enduring pain and suffering, and going through other hardships because of the accident. Do you have options?
If you’re unable to negotiate a suitable settlement outside of court, filing a lawsuit may be your best option. If you go to court, the money award you receive isn’t limited by the insurance policy limits. California’s personal injury damages laws set how much you can receive from the at-fault party or parties.
Under California law, you may be entitled to full, fair, and reasonable compensation for the damages that the at-fault party caused. This includes direct damages, like to your car and your body during the accident. Additionally, you may receive compensation for the harm to you, your life, and your family because of the accident. In other words, compensation for your pain and suffering and lost wages.
Unfortunately, just because a court may award you damages does not mean you will be able to collect them. Underinsured drivers often lack the resources to pay a judgment. Your attorney can investigate to help you determine whether filing a lawsuit will be worthwhile.
If you have uninsured/underinsured motorist coverage on your own insurance policy, you can make a claim with your own insurance company up to the limits of that policy. A lawyer can help you navigate claims with both the at-fault driver’s insurance company and your own insurance company.
Hiring a knowledgeable and trustworthy auto accident lawyer helps you maximize the recovery you receive.
The Beliz Law Firm—Trusted By Southern California Since 2011
Car accident victims need someone they can trust on their side. After all, insurance companies want to save money and at-fault parties aim to pay as little as possible. Meanwhile, car accident victims and their families must pay the price of an accident that wasn’t their fault.
Without an attorney in their corner fighting for them, victims may unknowingly sign away their rights to compensation and accept a car accident settlement that’s far less than what their claim is worth. For nearly 20 years, Attorney Michael Beliz has helped numerous victims recover for their losses. We take on faceless insurance companies and hold at-fault parties responsible. We offer free case reviews and don’t charge you a dime in upfront legal fees. Contact us today.