What to Do When Accident Losses Exceed Insurance Policy Limits?

When you are involved in an Orange County accident, you are likely to suffer a wide range of losses. These may include physical injury, vehicular damages, pain and suffering, as well as long-term losses such as lost wages. When the other driver is at fault, you have the option of recouping compensatory damages to cover these losses. An Orange County car accident attorney can help you recover these damages.

Compensation Options After a Crash

In the immediate aftermath of an accident, you typically have two ways to go. You can file with your insurer and seek damages. This option has several benefits. It helps you gather damages quickly and without having to undergo a lot of questioning and inspection. It also lets you meet your crash-related expenses quickly when the losses are relatively low.

Alternatively, you can file for damages with the insurer of the at-fault driver. This is somewhat more complicated as you have to negotiate with the insurer for a fair settlement. You are required to produce relevant evidence, send a formal demand letter, and then communicate with an adjuster.

Even when you have a fair claim and the insurer accepts it, there’s no guarantee that your losses will be fully covered. This is because the actual payout from the insurer also depends on the limits of the insurance policy. This is true whether you are filing with your own insurer or with the insurer of an at-fault party.

Insurance Policy Limits and Accident Compensation

Any liability insurance policy has a maximum cap. This cap denotes the maximum amount of money that is available under the policy. The actual policy limit is clearly noted when an insurance policy is bought. If a policy has a limit of $30,000, for instance, this means that the insurer is liable to pay only $30,000 when the policy is rightfully invoked.

This limitation means that a policy may or may not entirely cover your crash-related losses. In minor accidents, the losses amount to only a few thousand dollars. But in more serious crashes, the losses can mount up to tens of thousands of dollars. When that happens, insurance policies are often insufficient in fully covering the losses.

If your crash-related losses are not covered by your insurer or that of the at-fault driver, here are your legal options:

  • Umbrella Insurance Policy
  • Personal Injury Lawsuit
  • Insurer Bad Faith Lawsuit

Umbrella Insurance Policy

A person or party may have a smaller amount of money available under their auto insurance policy. However, the same entity may have a broader umbrella policy which has a more relaxed policy limit. In the case of companies and corporate entities, the umbrella policy often has a limit set at several million dollars.

If the primary auto insurance and liability policy does not cover your losses, you can investigate if the at-fault party has an umbrella policy. If they do, you can seek the outstanding losses under this policy.

Personal Injury Lawsuit

Your second option is to pursue a personal injury lawsuit against the negligent party. This is a viable option only when the other party has valuable assets that can be liquidated to pay for your losses. If the other party has no significant assets, you can’t recover compensation even if your lawsuit is successful. This is why it is vital that you consult your lawyer before filing a lawsuit.

Insurer Bad-Faith Lawsuit

Another option that is available in some personal injury cases is an insurer bad-faith lawsuit. As the name suggests, this type of lawsuit is possible only in cases where an insurer deliberately turns down a fair claim. You can typically file a bad-faith lawsuit when an insurer unfairly delays payment, refuses payment without a fair reason, or does not investigate the accident properly.

Under California’s Insurance Code Section 790.03, insurance companies guilty of bad faith shall face penalties. These include the award of your economic losses in addition to punitive damages, attorney fees, and non-economic losses. In many cases, the amount received at the end of an insurer bad-faith lawsuit is many times the actual amount of losses.

How Can an Orange County Car Accident Attorney Help?

If you have suffered an accident in Orange County, CA, we can help you. Here at the Crockett Law Group, we help you explore all your legal options in the wake of a crash. Our aim is to help you recoup full compensation for your crash-related losses. Our attorneys prepare and file a claim on your behalf, negotiate with the insurer, and seek a fair settlement. We also work with you through a trial if your case goes to a court of law. Reach out to us today to discuss your Orange County crash with our attorneys.

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