How Often Do Auto Accident Settlements Exceed the Policy Limits in California?

Car accidents can leave you with a pile of bills—medical expenses, car repairs, and lost income. But what if those costs are more than the other driver’s insurance is willing to pay? That’s where understanding insurance policy limits comes in.Every auto insurance policy has a cap on how much it’ll pay out for an accident—that’s the policy limit. So, how often do auto accident settlements exceed the policy limits? And what can you do if you find yourself in that situation?

Today, we’ll discuss how to know if your car accident exceeds policy limits and what to do if it does.

What Are California Auto Insurance Policy Limits?

When you hear the term “policy limits,” it simply refers to the most your insurance company will pay for damages if you’re at fault in an accident. In California, every driver must carry a minimum amount of insurance, but those minimums don’t always cover the total cost of a serious accident.

California law has minimums for auto liability insurance limits:

• $15,000 per person for bodily injury;
• $30,000 per accident for bodily injury (if more than one person is hurt); and
• $5,000 for property damage.

It is important to note that effective January 1, 2025, the minimum liability coverage required under California law will increase to 30/60/15.
Additionally, insurers must offer the following optional insurance to drivers:

• $1,000 for medical payments;
• $15,000 uninsured motorist coverage per person; and
• $30,000 uninsured motorist coverage per accident (if more than one person is hurt).

Uninsured motorist coverage generally mirrors the amount of coverage for bodily injury in the underlying policy. When the coverage limits increase in 2025, uninsured motorist coverage may likewise increase.

While drivers have the right to decline this additional coverage, it’s important to consider its potential benefits. Medical bills and other costs associated with an accident can exceed $15,000.

Although many drivers opt for higher coverage limits, many Californians only carry the state-mandated minimums. In unfortunate situations where the damages go beyond the at-fault driver’s insurance limits, this additional coverage can offer valuable financial protection.

Scenarios Where an Accident Exceeds Auto Liability Insurance Limits

Sometimes, the cost of an accident is so high that it goes beyond what the at-fault driver’s insurance will pay. Let’s look at a few situations where this can happen.

• Catastrophic injuries. Accidents with major injuries often lead to sky-high medical bills that can easily exceed insurance limits. Examples of such major injuries include spinal cord damage or brain trauma.
• Extensive property damage. Crashes involving many vehicles or expensive cars can result in huge repair or replacement costs. These high costs can push settlements beyond policy limits.
• Multiple victims. When several people are hurt, the insurance payout is split amongst them. This split potentially leaves some victims with damages exceeding the at-fault driver’s coverage.

Besides apparent costs like medical bills and property damage, less obvious expenses can increase your claim, potentially pushing it beyond the policy limits. Some of these types of damages are:

• Emergency medical transportation and services,
• Surgeries and rehabilitation,
• Long-term disability,
• Lost wages, and
• Ongoing medical treatment and care.

While these aren’t the only factors that can increase your claim beyond policy limits, if any of them apply to your situation, there’s a strong possibility that your damages could exceed the at-fault party’s insurance coverage.

What Happens If Medical Bills Exceed Policy Limits?

When the cost of your accident is more than the other driver’s insurance can cover, it can feel like a roadblock. But don’t worry, you’ve got options.

1. Negotiating with the At-Fault Driver

You can try to work things out directly with the person who caused the accident. However, this might not be a fruitful endeavor because the person responsible for the accident may be unable to cover the extra costs.

2. Using Your Underinsured Motorist Coverage

This is where underinsured coverage in California comes in handy. If the at-fault driver doesn’t have enough insurance to cover your damages, your insurance might kick in to cover the difference—up to your policy’s limits.

3. Other Insurance Policies or At-Fault Parties

If multiple drivers were at fault, you might be able to seek compensation from each of their insurance policies. Additionally, if the at-fault driver was working at the time of the accident, their employer’s insurance might also be liable. This typically applies when the driver was using a company vehicle or performing duties within the scope of their employment at the time of the crash.

4. Going to Court

If the other driver’s insurance and your own underinsured coverage in California still doesn’t cover everything, you might have to take them to court. If you win, the judge could make the other driver pay you the rest of the money out of their pocket. Remember, there’s no guarantee they’ll have the money to pay you, even if you win.

Steps to Take If Your Car Accident Exceeds Policy Limits

If you’re concerned about the insurance company undervaluing your claim, the smartest move is to consult with a car accident lawyer from a respected California personal injury law firm. Wells Call Injury Lawyers can help you see the full extent of your damages—not just current medical bills but also potential future needs, lost wages, and even the emotional impact of the accident.

Once you have a clear picture of your case’s true value, you’ll be better equipped to assess the insurance company’s offer. If it’s unfair, we can explore other avenues, such as negotiating a higher settlement or even taking the case to court to fight for the compensation you deserve.

Remember, if you suspect your damages exceed the insurance coverage, don’t delay. The sooner you seek legal advice, the stronger your position will be to achieve the best possible outcome.

How Long Do I Have to File a Lawsuit?

In California, the clock starts ticking the moment you’re in an accident. You generally have two years to file a lawsuit for personal injuries and three years for property damage. Missing these deadlines can mean losing your right to seek compensation.

When Your Claim Exceeds Insurance Policy Limits, We Can Help 

How often do auto accident settlements exceed the policy limits? The unfortunate truth is it happens more frequently than you might think, especially when serious injuries are involved. If you are facing a situation where the at-fault driver’s insurance isn’t enough, or you’re concerned about your California auto insurance policy limits, don’t hesitate to contact a car accident lawyer.

At Wells Call Injury Lawyers, we’re a California personal injury law firm with a proven track record. Since 1984, we’ve been fighting for accident victims, recovering over $500 million for our clients. We don’t back down from insurance companies, and we believe in giving you direct access to an experienced lawyer who will listen and understand your situation.

We know the tactics insurance companies use, and we have the hard-fought experience to counter them. If your claim exceeds policy limits, you need more than just legal assistance—you need a team that will work to pursue the maximum compensation you deserve. Call us today or fill out our online form for a free consultation.

Resources

• Cal. Ins. Code § 11580.2m, link
• Cal. Code of Civil Procedure § 335.1, link
• Cal. Code of Civil Procedure § 338, link
• How to Get the Most Money from a Car Accident Settlement in California

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