Will Your Insurance Coverage Protect You in A Car Accident Lawsuit?

Tragedy can happen in an instant. For one 21-year-old in Missouri, that instant occurred when the car in which he was a passenger was struck by a drunk driver, rendering him a quadriplegic. Suddenly, the young man was facing a lifetime of enormous medical expenses and costly lifestyle adjustments through no fault of his own. Situations such as this pose serious reminders about the importance of having auto insurance and the protections it can provide in a car accident lawsuit.

The lawyers at Padberg, Corrigan & Appelbaum were able to help alleviate this young man’s financial burden by negotiating a settlement for the maximum amount of the insurance policy covering the at-fault driver: $1.25 million. But what would have happened if the other driver was uninsured? Or insured for a much smaller sum? How would the young man have paid for his continuing medical care, or accessibility adjustments to his home?

In the instances where a fatality occurs, the consequences are even more dire, because the insurance policy also affects the survivors. A victim’s dependent children or spouse could be left with little to cover the costs of future education, housing and basic needs.

Most states in the U.S. have introduced laws requiring car owners to have liability insurance covering a minimum amount of damages, which varies from state to state, but these minimums can leave grieving families and injured parties in desperate financial situations.

Having adequate insurance coverage is critical to protecting you, your family and your assets in a car accident lawsuit.

How Does Auto Insurance Work in a Car Accident Lawsuit?

To better understand why policy limits are important, it’s helpful to know the role insurance plays in a car accident lawsuit.

After a car crash, both involved parties call their insurance companies, which then take over and negotiate how much money, if any, will be paid out on a claim. If there is a dispute over the amount owed or which party is at fault, an injured party may file a personal injury lawsuit against the other driver or their insurance company. When injuries are severe, the other driver’s insurance company may be more reluctant to pay for some bills in full or in a timely way, which is another reason to contact a personal injury attorney. In the case of a lawsuit, insurance companies can only offer up to “policy limits,” which means if your medical expenses and property damage is greater than the coverage, you will personally be responsible for the amount owed (regardless of who is at fault).

Why the State Minimum Car Insurance Is Not Enough

People who have been injured in automobile collisions can rack up astronomical medical bills, property damage, lost income, and pain and suffering. However, the amount the injured party is able to recover from the insurance company, whether it’s their own or that of another party, is often limited by the car insurance policy.

For example, in Missouri, the state minimum liability required is $25,000 for bodily injury (per person), $50,000 total for multiple people with bodily injury, and uninsured motorist coverage in the same amounts. Motorists must also have liability insurance for a minimum of $10,000 for total property damage. Illinois has the same requirements, except the property damage liability requirement is $20,000. Of course, the result is that many drivers buy policies that only meet these minimum requirements.

While that may seem like plenty when you’re shopping for car insurance, the reality is a single trip to the hospital in an ambulance could cost more than that. According to the National Safety Council, in 2015, the average cost of a car crash in which someone suffered a disabling injury was $90,000. And the average cost of a fatal crash was over $1.5 million.

If you are the injured party in an accident where only the minimum amount of liability was purchased, you could be left with nothing to cover the full cost of medical treatment and other damages. And if you’re the party at fault, it could leave you vulnerable to lawsuits to cover the injured party’s remaining costs. In either of these cases, it puts your and your family’s financial future at risk, as well as any assets you may own.

3 Additional Auto Insurance Coverages Every Driver Should Consider

The best protection in a car accident lawsuit is a solid insurance policy. There are many optional types of coverage that can be added to your basic plan, depending on the company, and they can carry relatively inexpensive premiums. The following are three types of automobile insurance coverage options that add much-needed protection to you and your family:

1. High uninsured motorist coverage

Unfortunately, many people don’t abide by the state’s minimum liability requirements. According to the Insurance Research Council, nearly one in eight drivers is uninsured. So what happens when a person is injured in an accident caused by an uninsured driver?

It is possible to sue an uninsured motorist at fault in an accident. However, the reason people are uninsured is often because of limited financial resources. That means the driver would likely be unable to pay a judgement. Consequently, it makes much more sense for a driver to rely on their own insurance policy for financial protection.

As previously mentioned, the minimum liability requirement for drivers in Missouri includes having uninsured motorist coverage. However, the amount required is only $25,000 for bodily injury and $50,000 when multiple people are injured.

Since this provision will protect you or a household member if you are hit or injured in an accident caused by an uninsured motorist, forgoing the minimum liability requirements for higher liability options is beneficial. However, it’s important to note many insurance companies require that your uninsured driver coverage not exceed the amount of your primary coverage, which means you’ll likely need a high-liability limit in your standard coverage.

2. High underinsured motorist coverage

Another provision to consider is for underinsured motorist coverage. This coverage protects you or a household member if you are injured in an accident by a motorist whose liability limits are too low to cover all the damages you sustain.

For example, if there are $100,000 in damages but the policy limit is only $50,000, then the insurance company isn’t going to pay the excess $50,000. This money, if awarded by a judge or jury, will have to come from somewhere else – such as out of pocket or through your own insurance.  Underinsured motorist coverage protects you and your family in such circumstances.

Similar to uninsured motorist coverage, your underinsured motorist limit will likely not be allowed to exceed your primary coverage, so a high-liability limit may be required for your underlying liability policy as well.

3. Umbrella coverage

Umbrella coverage, also known as excess coverage, is a type of insurance policy designed to provide extra personal liability insurance, beyond what typical automobile and homeowners policies cover. This type of coverage is especially helpful in the event of a car accident because it will provide extra protection above the limits of your underlying policy and protect you or a household member if you are at fault in an accident that catastrophically injures someone.

A serious car crash can easily lead to millions of dollars in damages, and having an umbrella policy that picks up where your car insurance policy ends is a critical tool in protecting your assets and your family’s financial future.

In order to be eligible for umbrella coverage, it’s common that the insurance company requires you to purchase the highest liability limits sold.

Hiring a Personal Injury Attorney for a Car Accident Lawsuit

It’s important to remember that your insurance company retains an entire team of lawyers and adjusters whose only job is to evaluate your injury claim as soon as they receive it. For this reason, it is essential that you retain counsel as soon as possible after you’re injured in an accident.

The car accident attorneys at Padberg, Corrigan & Appelbaum have decades of experience in car accident cases and obtaining the best results for their clients. If you’ve been injured in a car accident in Missouri or Illinois, contact the law office of Padberg, Corrigan & Appelbaum today to set up a free and confidential consultation.