When you’re in a car accident, certain expenses can pile up like regular bills, office visits, potential procedure costs, and on top of that you had to miss work.
One of the things that we do is, when we see that the medical records and bills exceed 12,500, we send a letter to the insurance company and ask for the policy limits for what that particular insurance policy has. And then we’ll get a letter back, usually within 30 days from the insurance companies, saying we have X number of dollars in what we call policy limits. Now, what are policy limits? When you buy an insurance policy, the insurance company agrees to pay for the damages that you cause, up to a certain limit. The insurance company is not agreeing to pay for everything under the sun. They are basing their premiums that they charge you, based on how much exposure they have for the injuries that you might cause.
We see a lot of insurance policies that have a $100,000 policy limit per person, and a $300,000 policy limit per accident. We also see some policy limits that are 25, 50, 25,000 per person, 50,000 per accident.
So, what does that mean exactly? If you have someone who hits you in a car accident and they only have the minimum, the very bare minimum state minimum that is required in Virginia, which is 25,000 per person, 50,000 per accident, what does that mean for you? Well, let’s say that you have a $100,000 case and the defendant only has $25,000 in insurance coverage, what that means is that you’re only going to get $25,000 from that insurance policy. Now, if we find that there is only one insurance policy and it’s the bare minimum, a lot of times what we’ll do is we’ll go out and look for other insurance policies. If we can’t find any that might ensure the person who hit you, the next step would be looking at your car insurance policies.
“Well, what does my insurance have anything to do with this accident? You shouldn’t rely on my insurance, I didn’t cause the accident, it’s the other person’s fault.”
Many times with every insurance policy that’s taken out, there’s also a line in there for what we call uninsured and underinsured motorist coverage. Underinsured motorist coverage occurs when a person hits you and they don’t have enough coverage to cover your case. So, in the example that we set, if you have a $100,000 case, and there’s only $25,000 in liability coverage, you are underinsured by how much, $75,000. Your car insurance would come in to pay as long as your limits are high enough.
Usually, your underinsured motorist coverage limits are the same amount as your liability limits. So, if you have a 100, 300 policy, then you will get paid your entire $100,000 case, but 25 comes from the person who hits you, insurance policy, and the other 75 comes from your insurance policy. If you have a $200,000 case, but you only had a $100,000 in UIM coverage, then you’re still only going to get that $100,000, and unfortunately, you are never going to see that extra $100,000, if you had a $200,000 case.
Alternatively, you could go against the defendant personally, and try to collect against their assets if you’ve got a judgment for $200,000. The problem with that is most people don’t have an extra $100,000 sitting around to give you. If they did, they would have a larger insurance policy. Most of the people who have an extra $100,000 sitting around, will have a 250 or $500,000, or a million-dollar policy. So, the chances of that being true, are slim to none. Then, what if you do go get a judgment for $200,000 and this person is what we call judgment proof, meaning they don’t have the money or the assets or the resources to get the money to pay that extra $100,000, what are they going to do? They’re going to go to bankruptcy court and they’re going to bankrupt your judgment and you’ll still never see that extra $100,000.
“Is that all I can get?”
When people say, “Are you sure that I can’t get more than a $100,000 in this case?” Well, the answer is, it depends. It depends on the facts and circumstances of every single case, and it depends on what your insurance policy is. If you have a good insurance policy with high underinsured motorist coverage, then you will be able to recover more, and probably get all of your expenses and your pain and suffering covered. But if you have bad insurance, that’s just as bad or worse from the defendant’s insurance company, then you’re not ever going to see that money.
Even if you do go get a judgment, that’s a super expensive piece of paper because the next thing the defendant’s going to do on the advice of his or her attorney, is to go to bankruptcy court.
If you feel like you need clarity in figuring out how much insurance is available for your case. We will love to have a conversation with you and talk to you about your case in particular. Give us a call, send us an email or send us a message on Facebook, we’d be happy to talk to you.