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California law requires that drivers maintain insurance coverage to legally operate a vehicle. However, the coverage required is only $15,000 per person/$30,000 per accident minimum.
As anyone who has been treated for a serious illness or injury knows, with the cost of medical treatment today, $15,000 does not go a long way. If you are injured in an accident and have to go to the hospital, you could easily incur $15,000 worth of bills in one day.
Or, more commonly, victims of a car accident get repeated treatment over the period of months and eventually incur more than $15,000 in medical bills. Even something as simple as repeated chiropractic treatment can add up over time if an individual is forced to go once or twice a week for a period of a few months.
The problem is, what happens when your damages exceed the policy limits of the at-fault driver’s coverage?
Normally, Insurers are Only Required to Pay the Policy Limit
Unless they act in bad faith, insurers are only contractually required to pay whatever the policy limit is for their insured. So, even if their insured is 100% at fault in an accident that caused you to incur $100,000 in medical bills, if the insured only has $15,000 in coverage, that’s all the insurance company has to pay.
Only in circumstances where an insurer rejects a good-faith offer within the policy limits can they be required under the law to pay additional funds.
Pursuing the Other Driver’s Assets is Difficult
If your damages exceed the at-fault driver’s policy limits, if you were to hire a law firm and file a lawsuit against them and secure a judgment, you could theoretically pursue that person’s assets. For example, if they had a policy where the limit was $15,000 and you went to trial and received an award from the jury for $50,000, you could attempt to recover that additional $35,000 from the other driver.
Practically speaking, this rarely happens. Most people do not have tens of thousands of dollars lying around to pay a judgment. Satisfying the judgment in other ways, such as levying property or garnishing wages, requires a large amount of time and diligence.
Your Own Insurance Can Help
This is why it is very important to carry a policy with some type of underinsured motorist coverage. This allows you to seek payment from your own insurance carrier once the other driver’s insurance has paid the policy limit.
Given how many people choose to have policies with the legal minimum coverage, you have to be able to protect yourself. Many of our clients at the Hariri Law Group have had to use this coverage, and it can be an extremely valuable option to have to help you out in an otherwise unfortunate situation.
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