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Can person sue for damages in excess of policy limits and take policy limits from insurance company in car accident?

San Francisco, CA |

I was in a car accident recently which I determined to be at fault. I have low policy limits. My impression at this time is that the other car and its occupant are going to try to milk this for everything they can. Can they take my policy limits from insurance company and then go ahead and sue me for the rest? For example if my limits are 30k, and they claim 50k. Do they get the 30k form insurance and sue me for the other 20k or does accepting the 30k mean they're settling and cannot also sue me? The property claim adjuster said that taking the policy limits means they're agreeing to that amount, and that part is settled. The adjuster for the bodily injury part said they can take the limits and go after me for the excess.

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Attorney answers 4


No. Your insurance company will not surrender its policy limits unless the plaintiffs sign a full release. Once they sign the release, they cannot sue you. The plaintiffs can decide not to accept the policy limits and simply sue you but that would be stupid. Assuming no bad faith, the insurance company has no liability beyond the policy limits. So the plaintiff would have spent months or years of time preparing for trial and $10,000 or more in depositions and expert witness fees only to get exactly what they could have had at least two years earlier. When they try to collect the difference from you, you would probably declare bankruptcy (in which case they get very little) or the plaintiff would seek garnishment of your wages. There are limitations on how much of your income is available. No Plaintiff and certainly no attorney wants to be paid at a few hundred dollars per month. For all of these reasons, the plaintiff will settle for the policy limits. Good luck.

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Your insurance company normally will not settle if they do not get a full release. The other party should go after their own underinsured coverage. They can come after you though.

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while they can come after you for the difference, usually your insurance company will offer you some measure of protection by refusing to settle for their policy limits unless the injured parties sign a full waiver preventing them from coming after your assets. I say usually, because sometimes the damages are large enough and significantly above your limits that the insurance company will suggest you retain your own lawyer, separate from the one representing your insurance, if the possibility of excess judgement exists.
In some states, they can combine insurance policies from your vehicle and their own uninsured/underinsured motorist coverage. That may be enough to protect you as well.
Sadly, that is the risk of carrying low limit coverage. If you find out they are proceeding against you personally I strongly suggest you consult with a lawyer to represent you in court.


It depends whether or not the insurance company gets a full release or not.

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