A serious injury case can be worth far more than the at-fault person’s insurance policy. That creates an important question: What happens when the available insurance is not enough to fully compensate the injured person?

The answer depends on the facts. In some cases, the insurance policy is the only realistic source of recovery. In others, there may be additional insurance, multiple responsible parties, uninsured or underinsured motorist coverage, commercial coverage, umbrella policies, or personal assets that should be investigated.

The Mason Firm represents people and families in serious injury, wrongful death, car accident, truck accident, uninsured motorist, and catastrophic injury cases throughout California.

Past results do not guarantee future outcomes. Every case is different.

What Are Insurance Policy Limits?

An insurance policy has maximum amounts the insurance company agrees to pay for covered claims. For example, an auto liability policy may provide a certain amount of coverage for bodily injury caused to another person.

If the at-fault driver has a relatively low policy limit but causes a catastrophic injury, the policy may be far less than the value of the claim.

A person could suffer:

• traumatic brain injury;
• spinal cord injury;
• amputation;
• major fractures;
• permanent disability;
• future surgery;
• significant lost income;
• or wrongful death;

while the at-fault driver has only limited insurance coverage. That does not necessarily mean the injured person is limited to that amount.

The Policy Limit Is Not Always the End of the Case

One of the first things a lawyer should do in a serious injury case is determine whether there are other possible sources of recovery.

That may include:

• additional insurance policies;
• umbrella or excess insurance;
• employer or commercial coverage;
• rideshare insurance;
• trucking company insurance;
• homeowner’s insurance;
• business insurance;
• uninsured or underinsured motorist coverage;
• multiple responsible defendants;
• public entity liability;
• product liability;
• or the personal assets of the at-fault party.

A serious case should not be evaluated based only on the first insurance policy that appears.

Umbrella and Excess Insurance Policies

Some individuals and businesses carry umbrella or excess liability insurance. These policies may provide additional coverage after the primary policy is exhausted. For example, a driver may have a primary auto policy and also have an umbrella policy that provides additional liability coverage.

In serious injury cases, attorneys may investigate whether the defendant has:

• umbrella insurance;
• excess liability coverage;
• commercial policies;
• homeowner’s policies;
• business policies;
• or other potentially applicable coverage.

These policies are not always immediately disclosed, so insurance investigation can be important.

Employer and Commercial Insurance

If the person who caused the injury was working at the time, an employer or business may also be responsible. This often arises in cases involving:

• delivery drivers;
• trucking companies;
• construction companies;
• sales employees;
• service vehicles;
• commercial transportation;
• rideshare companies;
• and other employees driving for work.

Commercial insurance policies often have higher limits than individual policies. The key question may be whether the person was acting within the course and scope of employment when the incident occurred.

Trucking Accident Cases

Truck accident cases frequently involve multiple potential sources of insurance. Depending on the circumstances, coverage may involve:

• the truck driver;
• the trucking company;
• the trailer owner;
• a shipping company;
• a broker;
• a maintenance company;
• another contractor;
• or additional commercial insurance policies.

That is one reason trucking cases require early investigation. The apparent driver policy may be only one part of the available coverage.

Rideshare Accidents

Uber and Lyft cases may involve different insurance coverage depending on what the driver was doing at the time of the collision.

Questions may include:

• Was the driver logged into the app?
• Had the driver accepted a ride?
• Was a passenger in the vehicle?
• Was the driver waiting for a request?
• Did another driver cause the crash?

The answers can affect which insurance policies may apply. Rideshare cases should be evaluated carefully before assuming the driver’s personal policy is the only source of recovery.

Uninsured and Underinsured Motorist Coverage

One of the most important potential sources of additional recovery is uninsured or underinsured motorist coverage. Underinsured motorist coverage may apply when the at-fault driver has insurance, but the policy is not enough to fully compensate the injured person.

For example, if the at-fault driver has limited bodily injury coverage and the injured person has significant damages, the injured person’s own underinsured motorist coverage may provide additional compensation, depending on the policy and applicable law.

Uninsured motorist coverage may apply when:

• the at-fault driver has no insurance;
• insurance coverage is denied;
• or a hit-and-run driver cannot be identified, subject to applicable requirements.

The injured person’s own insurance policy should be reviewed carefully.

Multiple Defendants May Mean Multiple Sources of Recovery

Some serious injury cases involve more than one responsible party.

For example, a case may involve:

• a negligent driver;
• an employer;
• a property owner;
• a public entity;
• a vehicle owner;
• a maintenance contractor;
• a manufacturer;
• or another business.

If multiple parties contributed to the injury, each may have separate insurance coverage or assets.

Identifying every responsible party can make a significant difference in a catastrophic injury or wrongful death case.

Can the At-Fault Person Be Personally Responsible?

Yes.

An insurance policy does not usually define the full amount of a defendant’s legal responsibility. If the damages exceed the available insurance, the defendant may potentially remain personally responsible for the excess amount. Whether pursuing personal assets makes sense is a practical question.

A lawyer may investigate assets such as:

• real property;
• investment accounts;
• business interests;
• vehicles;
• other property;
• and other non-exempt assets.

Not every defendant has collectible assets, and some property may be protected from collection under California law. That is why asset investigation is important before making decisions about settlement.

Why Asset Searches Matter in Catastrophic Injury Cases

In a case involving catastrophic injury or wrongful death, the difference between the policy limits and the value of the claim can be enormous.

A defendant may have:

• substantial home equity;
• business ownership;
• investment assets;
• multiple properties;
• or other financial resources.

If the insurance company offers the policy limits, the injured person and attorney must decide whether accepting that offer makes sense or whether additional recovery should be pursued.

That decision depends on the strength of the liability case, the value of the damages, the defendant’s assets, insurance coverage, litigation risk, and collectability.

What Is an Excess Judgment?

If a case goes to trial and the jury returns a verdict greater than the insurance policy limits, the judgment may exceed the available insurance.

For example, if the policy provides $300,000 in coverage but the jury returns a $2 million verdict, there may be an unpaid portion of the judgment above the policy limits.

That amount may become the personal responsibility of the defendant, depending on the circumstances. Whether that amount can actually be collected is a separate issue.

Can an Insurance Company Become Responsible Beyond the Policy Limits?

In some circumstances, insurance company conduct may create additional legal issues. California insurers owe duties to their insureds when handling claims. When liability is reasonably clear and damages are likely to exceed the policy limits, the handling of a reasonable settlement opportunity can become important. These issues are highly fact-specific.

A plaintiff should not assume that an insurance company automatically owes more than the policy limits. But in some cases, the insurer’s handling of the claim may become relevant to whether additional recovery is possible.

These cases require careful legal analysis.

Policy-Limits Demands and Settlement Strategy

Policy-limits demands can play an important role in serious injury cases.

A properly prepared demand may present:

• clear liability;
• serious damages;
• medical records;
• medical bills;
• expert opinions;
• future care;
• lost earnings;
• photographs;
• witness evidence;
• and a settlement opportunity within the available limits.

The strategy depends on the case. Sometimes accepting the policy limits is the right decision. Other times, additional investigation should happen first. That may include investigating:

• excess insurance;
• umbrella policies;
• employer liability;
• additional defendants;
• UM/UIM coverage;
• and personal assets.

Why You Should Not Automatically Accept a Policy-Limits Offer

An insurance company may offer the full policy limits relatively early in a catastrophic injury case. That may sound like a complete victory, but it may not be. Before accepting the offer, questions should include:

• Are there additional insurance policies?
• Is there umbrella coverage?
• Was the driver working?
• Is an employer responsible?
• Are there other defendants?
• Is there UM/UIM coverage?
• Does the defendant have significant assets?
• Are there lien issues?
• What are the future medical expenses?
• How strong is the liability case?
• What are the risks of continued litigation?

Accepting a policy-limits settlement may require releasing the defendant from further liability. That decision should be made carefully.

Example: A Serious Injury With Limited Insurance

Consider a person who suffers a catastrophic injury in a collision. The at-fault driver has $300,000 in liability coverage.

The injured person has:

• significant hospitalization;
• multiple surgeries;
• permanent disability;
• future medical care;
• substantial lost earnings;
• and lifelong limitations.

The case may be worth many times the available policy. A proper investigation might then look for:

• umbrella insurance;
• employer coverage;
• other responsible parties;
• underinsured motorist coverage;
• and personal assets.

The $300,000 policy may be only the starting point.

The Mason Firm’s $5.8 Million Auto Accident Settlement

The Mason Firm obtained a $5.8 million settlement in a serious automobile accident case involving a young client. The available insurance policy limits totaled approximately $2.3 million.

Through litigation and continued pursuit of the case, The Mason Firm obtained an additional $3.5 million above the available policy limits.

This result illustrates why serious injury cases should not always be evaluated solely by looking at the stated insurance policy limits.

Past results do not guarantee future outcomes. Every case is different and depends on its own facts, evidence, law, damages, insurance coverage, assets, available defendants, and litigation risks.

What Evidence Is Important When Coverage Is Limited?

When damages may exceed available insurance, the entire case should be investigated carefully.

Important evidence may include:

• insurance declarations pages;
• full insurance policies;
• umbrella policies;
• commercial policies;
• employment records;
• business records;
• ownership records;
• vehicle registration;
• corporate records;
• asset searches;
• property records;
• medical records;
• future medical care evidence;
• wage records;
• expert opinions;
• accident reconstruction;
• and evidence identifying additional responsible parties.

The earlier this investigation begins, the better.

Serious Injuries Require a Broader Investigation

The more serious the injury, the more important it becomes to investigate every potential source of compensation.

This is especially true in cases involving:

• traumatic brain injury;
• spinal cord injury;
• amputation;
• paralysis;
• catastrophic orthopedic injury;
• severe burns;
• permanent disability;
• birth injury;
• and wrongful death.

A catastrophic injury may create millions of dollars in lifetime medical care, lost earnings, and other damages. A limited policy should not automatically end the analysis.

Contact The Mason Firm

The Mason Firm represents people and families in serious personal injury, catastrophic injury, wrongful death, car accident, truck accident, uninsured motorist, and insurance coverage cases throughout California.

If you or a loved one suffered a serious injury and the available insurance does not appear sufficient to cover the damages, contact The Mason Firm for a free case review. The firm can investigate available insurance coverage, additional defendants, underinsured motorist benefits, excess policies, and other potential sources of recovery.

Call 619-752-5250 or contact us online to speak with a California personal injury lawyer.

This article is general information and is not legal advice. Insurance coverage and liability issues are highly fact-specific.