How Often Do Auto Accident Settlements Exceed the Policy Limits?

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Auto accidents can be devastating. They often leave survivors with hefty medical bills, months of lost income, or permanent disability.

Sometimes, the associated costs of auto accidents exceed the car insurance policy limit. The question is, how often do auto accident settlements exceed the policy limits?

Rarely. Accident victims are unlikely to receive more than the applicable policy limit.

This post will discuss auto insurance policy limits in Texas. Read on to know what would happen if your auto accident damages exceed your insurance limit.

Texas Auto Insurance Policy Limits

In Texas, all drivers are required to carry auto liability insurance. Texas law mandates that all drivers have a minimum coverage of:

  • $30,000 for a single person’s bodily injury
  • $60,000 for bodily injury in any one crash
  • $25,000 for property damage

This coverage is known as 30/60/25. While this is the minimum requirement, most motorists have higher insurance limits.

With this in mind, how often do auto accident settlements exceed the policy limits?

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Car accident settlements seldom go beyond the insurance policy limits. And if they do, insurance providers are not compelled to pay more than the policy limit.

If your claim is much higher than the policy limit, the insurance provider will settle it for the maximum amount of your policy. However, you may be left with substantial unpaid expenses.

Some Injuries Are More Likely to Secure Compensation Above Policy Limits

Compensatory damages are the most common damages settled in auto accident claims. That means victims often receive compensation for the costs and losses incurred due to the accident.

On this note, some injuries are more likely to attract settlements that exceed coverage limits than others. These injuries include:

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Any accident injury that calls for a lengthy hospital stay, multiple surgeries, inpatient treatment, and at-home or nursing care may quickly accrue expenses that exceed insurance policy limits.

However, if you recuperate quickly without long-term inpatient treatment and support, you will unlikely receive a payment exceeding the coverage limit.

What Happens If Auto Accident Damage Exceeds Your Car Insurance?

It is pretty unlikely that your settlement will exceed the at-fault driver’s auto insurance policy limit. If you settle with this driver’s insurer, you must waive additional liabilities. But you have other options when damages surpass coverage limits.

Uninsured/underinsured motorist coverage

You may have uninsured/underinsured motorist coverage as part of your personal insurance plan. This insurance offers protection when the at-fault motorist is uninsured or when they have insurance, but the cover is insufficient for your damages.

It also covers injuries from hit-and-run accidents, where the responsible driver cannot be tracked.

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So, once the at-fault driver’s insurer has paid out to the policy limit, you could try to recover further damages by filing a claim under your own uninsured/underinsured motorist coverage.

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Umbrella policy

If the at-fault party carries umbrella insurance, you might be able to recover additional damages from it. Umbrella policies take effect after other insurance policies have reached their maximum payouts.

Individual defendants are less likely to have umbrella insurance than corporations, such as trucking firms. Finding out the defendant’s level of coverage is crucial, however.

Doing this allows you to exploit as many resources as possible to ensure you receive fair compensation.

Other liable parties

There are cases where multiple parties are responsible for an accident. When this happens, you can seek compensation from each at-fault party and their insurance providers.

A knowledgeable attorney can assist you in identifying all potentially liable parties.


You could hold the at-fault driver’s employer vicariously liable if the driver were on the job when they hit you.

Generally, if the party acted on the business’s behalf when the accident happened, the claim befalls the respondeant superior doctrine.

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For instance, if a delivery person strikes you while on duty, the trucking firm and the delivery person may be liable.

Product manufacturers and distributors

The maker or distributor can be liable if a defective auto part caused or contributed to your injuries. You can file a product liability claim against the maker or distributor of this product.

Government agencies

The government must ensure that public roadways are reasonably safe. So, if the road condition contributed to your accident, you can hold the municipal or state government responsible for the auto accident.

Suing the at-fault party 

Suing the at-fault party and getting a court verdict is also possible. However, there’s no guarantee of getting more compensation for doing so.

Most individuals are judgment-proof whenever a claim surpasses policy limits. In other words, even if you win a lawsuit against the at-fault party, they might not have possessions you can confiscate to cover your damages.

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It is also crucial to note that some states, including Texas, prohibit the seizure of some assets for civil judgments.

That’s why you should hire a car accident attorney after an accident. A knowledgeable attorney will help you understand your options and walk you through the claims process.

Contact An Auto Accident Lawyer Today

So, how often do auto accident settlements exceed the policy limits? They rarely do. But if this happens to you, seeking legal counsel is the best course of action.

Don’t negotiate or accept a settlement without consulting an experienced car accident attorney. At Legal Giant, we can make this easier for you by linking you to experienced lawyers near you.

Our partner car accident lawyers will handle your case from start to finish and can negotiate fair compensation that covers all your damages.

Contact us at (855) 740-5024 today to get started.

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