What Happens If Medical Bills Exceed Policy Limits for Car Accidents

If medical bills exceed policy limits for car accidents, the injured person may be left with a significant financial burden. This can be a nightmare scenario for anyone involved in a car accident.

Typically, car insurance policies have limits on the amount of money they will pay for medical expenses. For example, a policy may have a $10,000 limit for medical bills, but if the actual medical expenses are $20,000, the injured person may be responsible for paying the remaining $10,000.

In some cases, the injured person may be able to sue the at-fault driver for additional compensation. However, this can be a lengthy and costly process.

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If the other driver was at fault in your accident and their auto insurance policy doesn't have you covered, you'll have to depend on your insurance limit. This is also true if the other driver was at fault and did not have insurance, assuming you have uninsured motorist insurance.

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California requires drivers to purchase at least $30,000 in coverage per accident. This includes a minimum of $15,000 per person for medical expenses.

If you're injured in an accident by a driver with the minimum policy limits, you'll generally not be able to collect more than $15,000 for your medical expenses. This is because the minimum coverage limits in California are among the lowest in the country.

Drivers in California can purchase more coverage than the minimum required, and some drivers do. However, the mandatory coverage amounts are the minimum required to legally drive in the state.

Curious to learn more? Check out: Motor Carrier Act of 1980 Minimum Insurance Requirements

You'll face out-of-pocket costs when medical bills exceed policy limits, and this can be a significant financial hit. Many people end up setting up payment plans with their healthcare providers to break up these large costs into smaller, more manageable payments.

This can add to the stress of dealing with both medical recovery and financial strain. You'll need to pay the remaining balance yourself, which can be overwhelming, especially with long hospital stays or expensive medications.

The financial impact of out-of-pocket costs can be substantial, and it's essential to be prepared for this possibility.

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Government assistance programs can provide significant relief from medical debt. Medicaid offers health coverage for those with lower incomes and typically has broader coverage than private insurance.

If your medical condition leads to a disability, you might qualify for Social Security Disability Insurance (SSDI), which can help ease some of the financial burden.

Many hospitals also offer financial assistance or charity care programs, which can reduce or eliminate medical debt for qualifying patients. These programs are usually based on income.

You may have secondary insurance options, such as supplemental policies or programs like Medicare or Medicaid, which can provide additional help if you meet certain eligibility requirements.

Secondary insurance can make a huge difference in covering what your primary insurance won’t, though it’s essential to understand the limits and restrictions that come with these policies.

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If the insurance limit is not enough to cover the costs of an accident, you can pursue a claim for financial losses, which can cover the amount that exceeded the insurance limit.

Additional reading: California Insurance Claim Time Limit

The insurance company will not cover anything above liability insurance policy limits, but it's possible the driver has a secondary "umbrella policy" that can increase policy limits and provide more money for a settlement.

In Colorado, liability insurance is required to cover bodily injury and damages to the other person's property, with a minimum coverage of $25,000 for one person's bodily injury, $50,000 for additional people's bodily injury, and $15,000 for personal property damage.

If the at-fault driver has a high enough insurance policy, you may be able to settle for the policy limits, but if the damages exceed the policy limits, you can pursue a lawsuit to try to collect the excess amount.

Here are the Colorado state minimum liability insurance requirements:

Liability is a crucial concept to understand when it comes to accidents and their aftermath. In Colorado, liability insurance is mandatory for vehicle owners, and it's designed to cover the costs of bodily injury and damages to others' property if you're at fault.

The law requires liability insurance to cover a minimum of $25,000 for bodily injury or end-of-life costs of one person. This amount can add up quickly, especially if medical bills are involved.

Liability insurance also covers costs for any additional people involved in the accident, up to $50,000. This is important to note, as it can help protect you from financial ruin in the event of a serious accident.

Personal property damage is also covered, with a minimum of $15,000 per accident. This can help you repair or replace damaged property, such as a vehicle or building.

Here's a breakdown of the minimum liability insurance requirements in Colorado:

Settlements can be complex, but understanding the basics can help you navigate the process. If the insurance limit is not enough to cover costs, you can pursue a claim for financial losses, which can cover the amount that exceeded the insurance limit.

Insurance companies will only cover up to the liability insurance policy limits. However, the at-fault driver may have a secondary "umbrella policy" that increases policy limits and provides more money for a potential settlement.

Knowing the at-fault driver's policy limits can help you determine your settlement demands. However, insurance companies are not required to disclose policy limits in liability claims upon request.

If you file a lawsuit, policy limits information will come to light as part of the litigation process. However, you may be able to compel disclosure of policy limits prior to filing a lawsuit by sending the insurance company a demand letter.

If a jury awards a verdict in your favor, the insurance company will only pay up to the policy limits. If the jury awards more than the policy limits, that amount is known as an "excess verdict."

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You can pursue a lawsuit against the at-fault driver if their insurance policy limits are not enough to cover your costs. This is because drivers are liable for the full amount of losses they cause.

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 if the driver has no collectible assets.

You can only collect compensation if the driver has assets such as wages, bank accounts, or property. Collection could involve garnishing wages, levying a bank accounts, or placing liens on real or personal property.

Some people may attempt to hide or dispose of their assets, making it harder to collect compensation. If the at-fault driver has no collectible assets, pursuing compensation from other sources may be more productive.

In some cases, you may be able to compel the insurance company to disclose policy limits prior to filing a lawsuit by sending a demand letter. However, you must meet certain conditions for this demand to have legal effect.

Consulting a skilled car accident attorney can help you determine the best course of action based on the unique facts of your case. They can also help you investigate the driver's financial viability and determine whether a lawsuit against the driver is a good option.

For another approach, see: How to Protect Assets from Medical Bills

If your medical bills surpass the amount your insurance policy is willing to cover, you're left to figure out how to pay the rest. You might expect to receive a settlement from the at-fault driver's insurance company, but that's not always the case.

Insurance companies have no legal obligation to pay a settlement to an injury victim that is greater than policy limits. For example, if you have $100,000 in medical expenses and the at-fault driver only has coverage for $50,000 in bodily injury per person, then the insurance company is not required to pay you more than $50,000 for your medical bills.

You may be able to file an underinsured motorist (UIM) claim with your own insurance company, which will pay for medical costs and other expenses that exceed the other driver's policy limits. Your insurer will pay up to your own insurance limits for your UIM claim.

The at-fault driver may have an umbrella policy, which pays for excess expenses in the event that an accident exceeds insurance policy limits. Claims involving catastrophic injuries can involve medical expenses that far exceed policy limits, so this type of coverage can be important.

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You may also be able to file a personal injury lawsuit against the at-fault driver. A person who causes a motor vehicle accident can be held financially responsible for the losses that they caused above and beyond the insurance policy limits.

To protect yourself from exceeding policy limits, it's essential to know your policy inside and out, including any annual or lifetime limits on your policy. Consider supplemental insurance if you're at risk of exceeding your insurance limits, and start negotiating with your healthcare providers early to explore payment plans or discounts.

Here are some steps you can take to protect yourself:

Recovering from underinsured or uninsured drivers can be a complex process, but there are options available to you. You can collect additional damages from other sources, such as the at-fault driver, your medical payments coverage, or your underinsured motorist coverage.

In some cases, you may be able to recover more than the insurance policy limits. This is especially true if the at-fault driver has collectible assets, which can be used to garnish wages, levy a bank account, or place liens on real or personal property.

If the at-fault driver has no collectible assets, pursuing compensation from other sources may be more productive. You can also try to recover from other parties to the case, such as the employer of a commercial vehicle driver who hit you.

Here are some potential sources of compensation:

In North Carolina and South Carolina, uninsured/underinsured motorist coverage is included in every policy. However, this coverage may not apply in your particular circumstances. It's essential to have a clear understanding of your policy and the options available to you.

If you're dealing with the aftermath of a car accident and medical bills are piling up, don't hesitate to seek help. An attorney can guide you through the process and help you choose the right strategy for your case.

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