What Happens When Car Accident Claim Exceeds Insurance Limits in Florida?

Most drivers in Florida carry auto insurance. But sometimes the amount of this insurance is not enough to cover the injured person’s medical bills and loss of income.

What happens if the car accident claim exceeds your insurance limits? The injured person can (1) reach a settlement, (2) file an uninsured motorist claim, or (3) file a lawsuit for the excess.

Reach a Settlement

If your insurance coverage is not enough to compensate the injured person, then the injured person’s attorney will most likely negotiate a settlement at your policy limit.

For example, if your insurance limit is $50,000 per person for bodily injury and the claim is $100,000, then the two sides will probably agree to settle for the $50,000.

If the claim is settled within your policy limit, that means you will not owe anything else. The settlement should come with a release of liability signed by the injured person.

File an Uninsured Motorist Claim

When the claim is greater than your insurance limit, the injured person can also file a claim with their own insurance provider if they have uninsured motorist coverage. Uninsured motorists coverage applies when the liable person has no insurance or not enough insurance for the claim.

File a Lawsuit

The injured person and their attorney may file a lawsuit against the liable person. Often this is just a negotiating tactic the attorney uses against the insurance company to get more money out of the carrier.

In rare cases, however, the injured person is actually interested in pursuing collection against the liable person. When the insurance limit is low and the damage is high, the personal injury lawyer will be interested in seeing whether they can collect a higher sum from the liable party.

Taking a personal injury carry all the way to trial and judgment is a time-consumiung and expensive process. However, if the liable person has sufficient non-exempt assets, it may be worth it for the personal injury lawyer to pursue the claim.

On the other hand, the at-fault driver can try to protect their assets in anticipation of a lawsuit from the injured person. Florida law provides many ways for judgment debtors to protect their assets from creditors.

In the event of an excess judgment, the insurance provider still pays up to the amount of the policy. The creditor can try to recover the balance of the judgment from the defendant’s non-exempt assets. 

The most likely scenario in which an injured person files a lawsuit against the at-fault driver is when (1) the insurance policy limit is low compared to the damages incurred and (2) the liable parties (at-fault driver or owner of the vehicle) have a substantial amount of assets at risk of collection.