It’s a question no one wants to ask after a collision: What if the driver who hit me can’t afford to pay for my injuries? When the costs of your medical care, lost income, and property damage are greater than the at-fault driver’s insurance coverage, the accident is said to have “exceeded insurance limits.” This can be a daunting prospect, but it’s rarely a dead end, especially when a car accident lawyer can help identify additional options for recovery.
Fortunately, Nevada law provides several other pathways for injured people to secure the financial resources they need, whether through their own insurance policies or by identifying other parties who may share responsibility for the crash.
Key Takeaways about What Happens When a Car Accident Exceeds Insurance Limits
- When accident damages are greater than an at-fault driver's policy maximum, it is known as a situation where a car accident exceeds insurance limits.
- An injured person's own Underinsured Motorist (UIM) coverage can be a vital source for covering damages that exceed the other driver's policy.
- It may be possible to file a personal lawsuit against the at-fault driver to seek compensation from their personal assets.
- A thorough investigation could reveal other parties who share responsibility for the accident, such as an employer or a government agency.
- Nevada law sets minimum liability insurance amounts that are often insufficient to cover the costs of a severe injury.
Understanding Nevada's Minimum Car Insurance Requirements
Every driver on roads like U.S. 395 or I-80 is required by law to carry a certain amount of liability insurance. This insurance is designed to pay for the damages they cause to others in an accident. In Nevada, the state mandates minimum coverage amounts that all drivers must have.
Here, the minimum liability coverage is often referred to as 25/50/20. Here’s what those numbers mean:
- $25,000 for bodily injury or death of one person in an accident.
- $50,000 for bodily injury or death of two or more people in an accident.
- $20,000 for damage to property in an accident.
While this is the legal minimum, the reality is that these amounts can be exhausted very quickly in a serious crash. A single trip to the emergency room, surgery, and a few days in a hospital can easily cost more than $25,000. For catastrophic injuries like a traumatic brain injury (TBI) or spinal cord damage, medical bills can run into the hundreds of thousands or even millions of dollars over a lifetime.
This is why many responsible drivers choose to purchase policies with much higher limits. However, if you are hit by someone with only minimum coverage, your damages could easily exceed their insurance limits.
What to Do When a Car Accident Exceeds Insurance Limits in Nevada
If you find yourself in this difficult situation, it's important to understand that you are not necessarily without options. There are several avenues you can explore to recover the full amount of your losses. An experienced personal injury attorney can help you determine the best path forward for your unique circumstances.
Tapping Into Your Own Insurance Policy: UIM Coverage
One of the most common and effective ways to get compensation when a car accident exceeds insurance limits is by using your own insurance policy. Specifically, this involves Underinsured Motorist (UIM) coverage.
UIM coverage is an optional but highly valuable part of your own auto insurance policy. You purchase it to protect yourself in the exact scenario where you are hit by a driver who has insurance, but not enough to cover all your damages. It is different from Uninsured Motorist (UM) coverage, which applies when the at-fault driver has no insurance at all.
The process generally works like this: First, you would make a claim against the at-fault driver's insurance policy and recover the maximum amount available under their plan (for example, the $25,000 bodily injury limit). If your damages are greater than that amount, you can then file a UIM claim with your own insurance company to cover the difference, up to the limits of your UIM policy.
Pursuing a Lawsuit Against the At-Fault Driver
Another potential option is to file a personal injury lawsuit directly against the driver who caused the accident. If you win the lawsuit and are awarded a judgment for an amount that is more than their insurance policy limit, the at-fault driver would be personally responsible for paying the rest.
This could involve collecting from their personal assets, such as:
- Bank accounts
- Real estate or other property
- Investments
- Future wages (through a process called wage garnishment)
It is important to be realistic about this option. Filing a lawsuit is only a practical path if the at-fault driver has significant assets to collect. If the person has few assets, you could win a large judgment in court, but have no way to actually get the money. This is sometimes called a "paper victory."
A personal injury lawyer can help investigate the at-fault driver's financial situation to determine if pursuing a personal lawsuit is a worthwhile endeavor.
Identifying Other Responsible Parties
In some accidents, the driver is not the only person or entity at fault. A detailed investigation of the crash might reveal that other parties share some of the responsibility. Holding these third parties accountable can open up additional sources of compensation, often from commercial insurance policies with much higher limits.
Potential third parties could include:
- An Employer: If the at-fault driver was on the clock and performing job duties at the time of the crash, their employer could be held liable. This is common in accidents involving commercial trucks, delivery vans, or any employee running an errand for their company. The legal principle is called respondeat superior, which means "let the master answer."
- A Government Entity: A city, county, or the state could be partially responsible if a dangerous road condition contributed to the accident. This might include a poorly designed intersection in Sparks, a lack of proper signage, or a large pothole that was left unrepaired.
- A Vehicle Manufacturer: In some cases, a defect in a vehicle or one of its parts, like faulty brakes or a malfunctioning airbag, may have caused or contributed to the collision.
- A Bar or Restaurant: Nevada has specific laws regarding serving alcohol. If a bar or restaurant knowingly served alcohol to a minor who then caused a drunk driving accident, the establishment could be held liable for the resulting damages.
Identifying all potentially responsible parties is a complex task that often requires a thorough investigation, but it can be essential when a car accident exceeds insurance limits from the primary at-fault driver.
Calculating the Full Value of Your Car Accident Claim
To understand why damages so frequently exceed minimum insurance policies, it is helpful to look at all the different types of losses that can result from a serious accident. A personal injury claim aims to make you "whole" again by compensating you for everything you have lost. These losses, called damages, are typically grouped into two categories.
The full value of a claim often includes:
- Economic Damages: These are the direct financial losses with a clear monetary value. They include things like past and future medical expenses, lost wages from being unable to work, diminished future earning capacity if you cannot return to your previous job, and the cost of repairing or replacing your vehicle.
- Non-Economic Damages: These are intangible losses that do not have a specific price tag but are just as real. They are meant to compensate you for the human cost of the accident, including pain and suffering, emotional distress, loss of enjoyment of life, scarring and disfigurement, and permanent disability.
When you add up all these damages, especially in cases involving long-term injuries, the total can quickly surpass the low policy limits of the at-fault driver. According to the National Safety Council, the average economic cost of a crash involving a disabling injury can be well over $100,000, a figure that does not even include non-economic damages. This highlights the importance of exploring every available avenue for recovery.
How a Reno Car Accident Attorney Can Help
When dealing with a situation where a car accident exceeds insurance limits, having a knowledgeable legal advocate on your side can make a significant difference. The process involves complicated insurance claims and potentially complex litigation that can be difficult to handle on your own, especially while you are focused on your physical recovery.
A personal injury lawyer can assist by performing several critical tasks:
- Conducting a Comprehensive Investigation: An attorney will go beyond the initial police report to determine exactly how the accident happened and who is at fault. This includes gathering evidence, speaking with witnesses, and hiring accident reconstruction professionals if needed to identify all potential sources of recovery.
- Performing an Asset Search: If suing the at-fault driver directly is a possibility, a legal team can conduct a formal asset search to find out if the driver has the financial means to pay a judgment. This allows you to make an informed decision about whether to pursue that course of action.
- Calculating Your Total Damages: A lawyer will work with your doctors, financial planners, and other professionals to build a comprehensive picture of your total losses. This ensures that you demand the full amount of compensation you are entitled to, accounting for both your current and future needs.
- Managing Communications with Insurance Companies: An attorney will handle all negotiations with the at-fault driver's insurance company as well as your own UIM provider. This protects you from tactics insurance adjusters may use to minimize your claim and allows you to focus on getting better.
By taking these steps, a lawyer can work to ensure you have the best possible opportunity to secure the financial resources you need for your recovery.
When a Car Accident Exceeds Insurance Limits FAQs
Here are answers to some common questions that arise when accident damages are greater than the available insurance coverage.
An experienced attorney has legal tools to formally verify all available insurance coverage. Through the discovery process in a lawsuit, they can require the at-fault party to disclose their policy limits and other financial information under oath, ensuring you have accurate information.
In most cases, your insurance premiums should not increase for using your UIM coverage in an accident that was not your fault. UIM coverage is a benefit you paid for to protect you in this specific situation. However, it's always a good idea to review the terms of your individual policy.
Nevada has a time limit, known as the statute of limitations, for filing a personal injury lawsuit. Generally, you have two years from the date of the accident to file your claim. If you miss this deadline, you will likely lose your right to seek compensation in court.
A policy limit demand is a formal letter sent by your attorney to the at-fault driver's insurance company demanding that they pay the full amount of the policy. This is often a critical strategic step. If the insurer unreasonably rejects a fair demand and you later win a larger amount at trial, the insurance company may be held responsible for the entire judgment, even the portion that exceeds the policy limit.
Yes, you may still be able to recover compensation. Nevada follows a "modified comparative negligence" rule. This means you can recover damages as long as you are found to be 50% or less at fault. Your total compensation award will be reduced by your percentage of fault. For example, if you are found 10% at fault, your award would be reduced by 10%.
When multiple people are injured, they all must share the at-fault driver's "per accident" liability limit (e.g., the $50,000 for bodily injury in a minimum policy). This makes it even more likely that the available insurance will be insufficient to cover everyone's damages, making UIM claims and third-party liability investigations even more crucial.
Contact Our Reno Personal Injury Lawyers Today
Learning that a car accident exceeds insurance limits can be a difficult moment, but it is not the end of your fight for fair compensation. At Viloria, Oliphant, Oster & Aman L.L.P., our dedicated team of trial attorneys has spent years helping individuals and families across Northern Nevada. We believe in our clients and in the work we do for them.
We prepare every case as if it is going to trial, and we have the resources to fully investigate your accident and identify all possible avenues for recovery. Our philosophy is to provide personalized, undivided attention to every client. When you call, we answer. We will take the time to hear your story, explain your options in clear terms, and build a strategy designed to hold the negligent parties accountable. If you have been seriously injured in a car, truck, or motorcycle accident, contact us today at (775) 284-8888 or through our online form for a free, no-obligation consultation to discuss your case.