What Happens if Medical Bills Exceed Policy Limits in California?
- If medical bills exceed the at-fault driver’s policy limits, you can pursue compensation through other sources, such as underinsured motorist coverage.
- California drivers must carry a minimum of $30,000 in coverage per accident, which may not cover serious injuries.
- You can potentially recover more than the policy limits by suing third parties, using med-pay coverage, or filing a claim with an umbrella insurance policy.
- Suing the at-fault driver personally is an option, but collecting compensation depends on their assets.
- Insurance companies can be held liable for damages above policy limits if they act in bad faith.
If your medical bills exceed the at-fault driver’s insurance policy limits, the insurance company must only pay up to the limit. However, this does not necessarily prevent you from receiving full compensation for your injuries. The at-fault driver’s insurance policy is just the starting point. You may be able to recover damages through multiple sources. Our knowledgeable car accident lawyers can identify all potential avenues of compensation so you are not the one left paying the bill.
Understanding Policy Limits in California
Auto insurance policy limits are the amount of insurance a driver purchases to cover the losses of people injured when the driver causes an accident. California requires drivers to purchase at least $30,000 in coverage per accident, which includes at least $15,000 per person. Drivers must also carry a minimum of $5,000 to cover property damage. If you are injured in an accident by a driver with these minimum policy limits, you will generally not be able to collect more than $15,000 for your medical expenses.
When your injuries are serious, your medical bills could quickly accumulate to hundreds of thousands of dollars, especially if you need multiple surgeries and extended rehabilitation. If your injuries are permanent, the lifetime medical expenses alone could reach the millions.
California’s minimum coverage limits are among the lowest in the country, and they are often far below the actual costs of serious car accident injuries. It is important to note that these mandatory coverage amounts are the minimum required to legally drive in the state. California drivers can purchase more coverage, and some drivers do.Â
Can I Recover More than the Insurance Policy Limits in California?
Yes, you can recover more than the insurance policy limits when the at-fault driver’s policy limits fail to cover all your medical expenses. You will also need compensation to cover other losses, such as lost wages, emotional distress, and pain and suffering. Your compensation does not have to be limited by the other driver’s policy limits. You may have multiple options for recovering more.
How To Recover More Than Auto Insurance Policy Limits
The other driver’s insurance usually pays medical bills after a car accident, but when the insurance coverage runs short, you may be able to collect additional damages from one or more of the following sources:
- Another party who caused or contributed to the accident
- Your medical payments coverage
- Your underinsured motorist coverage
- The at-fault driver
- Umbrella insurance policies
- An insurance company that denied your claim in bad faith
Recovering damages through these additional sources requires a more in-depth legal process than collecting from the at-fault driver’s liability policy. We can determine which options are available to you and help you pursue compensation through all of them.
Sue a Third Party
In some cases, multiple parties share liability for the accident. For example, an unsafe road condition or a defective vehicle component may have contributed to the accident. When you have our award-winning car accident lawyers on your side, we will perform a forensic investigation to identify the underlying causes of your accident and the parties responsible. The responsible parties may include the following:
- A government entity responsible for maintaining the roads
- A vehicle manufacturer or parts manufacturer
- A mechanic shop
- A trucking company
- A cargo loading company
- An employer
- The owner of the vehicle, if not the driver
These third parties often carry significantly more insurance coverage than the minimum policy limits for everyday drivers in California, making it easier to recover full compensation.
Filing an Underinsured Motorist Claim
An underinsured motorist policy covers medical expenses and other damages when the other driver’s insurance coverage is insufficient. After the at-fault driver’s insurance pays compensation, your underinsured motorist coverage will pay the difference up to your policy limits.Â
For example, suppose you have $50,000 in medical expenses, the at-fault driver carries the minimum coverage of $15,000 per person, and you carry $15,000 in underinsured motorist:
- You would be left with a $35,000 bill if the at-fault driver’s insurance pays up to the coverage limit: $50,000 – $15,000 = $35,000
- If your underinsured coverage is $15,000, you will still have $20,000 in uncompensated medical bills if your insurance pays up to the policy limit: $35,000–$15,000=$20,000
If you have a $50,000 underinsured motorist policy, your medical bills would be covered, and you would have $15,000 left for other damages:Â
- $50,000 underinsured policy limit – $35,000 in medical bills after the at-fault insurance pays = $15,000 for other damages.
If an uninsured driver hits you, your uninsured motorist coverage should cover your medical bills and other losses up to the policy limits.
Can Uninsured and Underinsured Motorist Insurance Refuse To Pay?
Recovering damages from an uninsured or underinsured motorist policy can be as difficult as recovering damages from the other driver’s policy. Your own insurance company may refuse to pay full damages, even if the at-fault driver’s insurance company paid. We can help you hold the insurance company accountable and recover fair compensation.
Your Med-Pay Coverage
Although California is not a no-fault state, you can purchase optional no-fault coverage for medical payments. The minimum amount available is $1,000, but you can purchase as much as you want. If you have this coverage, you can file a claim for medical expenses with your own insurance company up to your policy limit, regardless of who was at fault for the accident.
Suing the At-Fault Driver Personally
Drivers are liable for the full amount of the losses they cause, and you have a right to file a lawsuit against the driver for damages the insurance company does not cover. However, collecting compensation can be challenging. You will only be able to collect if the driver has collectible assets.Â
Collection could involve garnishing wages, levying a bank account, placing liens on real or personal property, and using collection agencies. Some people have no collectible assets. Others attempt to hide or dispose of their assets. If the at-fault driver has no collectible assets, pursuing compensation from other sources may be more productive. We can investigate the driver’s financial viability and determine whether a lawsuit against the driver is a good option in your case.
Suing the Insurance Company for Bad Faith
Insurers have a duty to indemnify their policyholders for the full amount of liability up to the policy limits. However, insurance companies often breach this duty by using faith tactics to limit the amounts they pay out. Such tactics might give you grounds to pursue a bad faith claim against the insurance company. In bad faith insurance lawsuits, judges can order insurance companies to pay damages above the policy limits.
Did You Know?
Some individuals carry an umbrella insurance policy, which provides additional coverage beyond the standard policy limits. If the at-fault party has this type of insurance, it may cover the excess damages.
Cutter Law Can Help You Recover Compensation for Your Medical Bills
We are a family-owned law firm with 130 years of combined experience and hundreds of millions of dollars in successful case results. Founding attorney Brooks Cutter is the proud father of two of our firm’s attorneys. Family is everything in our law firm, and your experience with our attorneys matters to us. We visit clients in their homes, share meals with them, look at their family photos, and more.Â
When you hire Cutter Law, you get more than an attorney: you get our entire law firm. Every attorney in our firm will work on your case so you get the benefit of our combined strengths rather than being limited to one attorney’s skillset. We will go out of our way to keep you informed, answering all your messages and welcoming your phone calls. We want you to call so we always know how we can meet your needs.
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