No, your auto insurance policy will not pay over the bodily injury limit to settle a lawsuit. Unfortunately, the insurance that you buy is the coverage that you have. If your insurance company settles a bodily injury case due to a car accident that you caused, then they will only pay the maximum of the liability coverage that you have purchased.
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No one wants to cause an accident but, from time to time, a careless thought, an unexpected animal or person darting into the road, or an inopportune cell phone call causes you to swerve or miss a red light and cause an accident. The good news is, you have car insurance. The bad news is, the person you struck wants more!
In cases like these, the auto insurance company prefers not to go to court. That’s not to say that they won’t go to court, but they do prefer to avoid it if they can. Typically a case like this will end with an arbitrator getting both parties to agree to a number. When that happens, the insurance company has your liability insurance numbers as the cap on that number.
What happens if the people want more than auto the insurance company will pay?
What happens next depends on whether the insurance company is refusing the pay any additional money to the claim, or if the insurance company has offered the max allowable with your coverage and the complainant wants more.
In the case of the insurance company refusing to pay, it is the insurance company that goes to court, sort of on your behalf but really on theirs. The complainant has to prove in court that the insurance company should pay more than the basic expenses from the accident.
If, however, the insurance company has offered the maximum allowed based on your policy choice, then you are the one that the complainant will take to court. The insurance company pays your maximum, if they agree it’s warranted, and the person you hit in the accident sues you for the rest.
In this case, you will be responsible for getting your own lawyer because your insurance company doesn’t represent you. Unfortunately, this is going to cost money and you are going to have to pay for it. In most civil cases, if you win your case, the complaining party has to pay all legal fees.
The bad news is that the law doesn’t limit how much someone can sue for in civil court. The good news is that your case will be tried with a jury. In addition, you can’t bleed blood from a turnip so, if you don’t have any money or assets, then the person suing isn’t going to gain much from their case.
What happens if I lose the lawsuit and cannot pay?
There are a lot of scare tactics used in this situation by lawyers. They will tell you that they are going to come after your house or garnish your wages until you pay what is owed.
The good news is that in most cases this won’t happen. A judge will not allow someone to come in and take your house, for example, if you don’t own it outright. What’s more, the judge will take your personal financial situation into consideration. If you live at home with four kids and you are the only source of income, your house is likely to be safe.
In addition, it is extremely rare for anyone to have their wages garnished in order to pay a lawsuit. The government does it to collect their taxes, and most states will do it in order to ensure you pay child support, but it is not common for them to garnish wages for the purposes of a civil suit.
However, a judge may determine that if you exceed a certain amount of income a year then they will revisit the issue of repayment to the complainant.
What if I don’t believe I am responsible for the accident?
From time to time, a police officer will make a summary judgment based on what they see at the scene and amend their statement at a later date when they get more details regarding the accident.
In these cases, it isn’t unusual for all the right people not to get the information that they need. If you are confident that you didn’t cause the accident, then you need to contact the reporting police officer and ask for their report. If it doesn’t jive with your recollection of the accident then you need to ask to meet with the officer as well.
In addition, it is important to have as much information regarding the accident as possible. This includes photos from the scene, statements from the witnesses and so on. Without this information, it is going to be difficult to contest your status as the at fault party in the accident.
Some auto insurance companies will simply pay the other person regardless, just to avoid lengthy court appearances, time with a mediator and so on. If you think this is wrong, you need to get a lawyer to represent you in this situation. In addition, you will want to change insurance companies too!
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