Can Car Accident Settlements Exceed Insurance Policy Limits? By William Chanfrau, Jr. on January 16, 2021

insurance policy beside judge’s gavelUnfortunately, car accidents are a common occurrence for drivers. To protect accident victims from the financial losses that are likely to stem from an accident, all drivers are legally required to carry car insurance. Depending on accident liability, automobile insurance may cover a driver’s personal accident losses, and/or those of other involved parties. 

Sometimes accident damages are greater than a driver’s insurance coverage, which leads many to ask, can car accident settlements exceed insurance policy limits? While the answer is generally no, the car accident lawyers at Chanfrau & Chanfrau can assist drivers in the Daytona Beach, FL, and Palm Coast, FL, area in collecting damages for losses that are greater than insurance limits.

Insurance Coverage Requirements

Under the law, all drivers are required to carry certain types and amounts of insurance coverage. However, specific insurance requirements vary by state. In Florida, drivers are required to carry a minimum of $10,000 in PIP (personal injury protection) and at least $10,000 in PDL (property damage liability). While these are the minimum requirements, drivers are free to pay for larger amounts of coverage.

Will an Insurance Company Pay Above Policy Limits?

The amount of insurance coverage that a person carries is considered their policy limit. When a driver is liable for an accident, their insurance company is required to negotiate with accident victims “in good faith,” meaning they take into account the full extent of accident losses and offer a settlement that is fair and reasonable. 

The one important exception is that insurance companies do not pay out settlements that exceed policy limits. This means that, even if the damages of an accident exceed policy limits, insurance companies will pay no more than the amount of coverage carried by their insured.

Options for Collecting Damages that Exceed Limits

Car accident losses add up quickly, so it is common for a victim’s damages to exceed insurance policy limits, especially if the liable driver carries only the minimum amount of insurance coverage required by law. Although it is not standard for insurance companies to offer settlements in excess of policy limits, there are other ways for victims to pursue the full financial compensation they are due. 

When accident damages exceed policy limits, it is especially important that accident victims work with a knowledgeable car accident attorney. Car accident attorneys, such as those at our Daytona Beach law firm, can review accident and injury details, insurance policies, and settlement offers to determine the best way to get victims maximum compensation. 

Typically, there are three options for collecting damages beyond policy limits: suing the insurance company, suing the liable driver personally, or suing other liable parties.

  • Suing the insurance company - If there is clear evidence that an insurance company has failed to negotiate in good faith (i.e. they offer less than policy limits when damages exceed limits), a bad faith claim can be filed. In these cases, insurance companies may be held liable for the full damages of an accident, even those that exceed policy limits.
  • Suing the liable driver personally - Rather than accepting a settlement of policy limits, accident victims can sue the liable driver personally for accident losses that exceed their insurance coverage.
  • Suing other liable parties: Car accidents do not always have a singular liable party. If other drivers or parties contributed to the accident, victims can sue them for additional accident damages.

Contact the Attorneys at Chanfrau & Chanfrau

If you’ve been involved in a car accident, the attorneys at Chanfrau & Chanfrau will look out for your best interest as we seek maximum compensation for accident damages. To discuss the details for your accident with our legal team, send us a message online, or call (386) 258-7313.

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Attorneys at Chanfrau & Chanfrau

Chanfrau & Chanfrau

Chanfrau & Chanfrau has been serving Floridians in Daytona Beach and the surrounding areas since 1976. With three attorneys and two locations, we have the resources to help you after an accident or injury. We are proud of our many achievements, including inclusion in:

  • America's Top 100 Attorneys
  • The National Trial Attorneys Top 100 List
  • Florida Trend's Florida Legal Elite

For more information about our legal services, contact our firm online or call (386) 258-7313 today.

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