When the other driver's insurance is too low to cover your injuries
How a motor vehicle injury attorney approaches low policy limits
The other driver may carry liability insurance but too little of it to cover a serious injury. That policy limit caps what that coverage pays. It doesn’t measure your full loss. Another possible source of payment is your own underinsured motorist coverage. It comes into play if you purchased it and its conditions are met. [1, 2]
Get all the numbers on one sheet
Find out how much injury coverage the other driver has available and what the insurer is offering. Pull out your own declarations page and check your underinsured motorist injury limit. Write down medical costs, lost pay, ongoing care and other effects you can document. The insurer will still judge who was responsible, whether the crash caused the injuries and what the claim is worth. Don’t add the policy limits together and assume you’ll be paid that total. [1, 2]
Let your insurer know early
Tell your own insurer that the other driver’s coverage may not be enough. Before you settle with the other driver, ask what notice, papers and claim steps your insurer requires. Signing a release could affect your insurer’s right to recover money. It could also affect your ability to claim underinsured benefits. Get a written answer before you sign or cash a final settlement check. [2, 3]
Figure out what you'll keep
Medicare may want to be paid back for crash care it covered. Lawyer fees, case costs and unpaid bills can also shrink what’s left from a settlement. Find out if any other plan is seeking repayment. If your injury is serious, ask a local attorney to review the coverage available and the proposed release. [3, 4]
What to ask before settling
- How much liability coverage can I draw on?
- What does my underinsured coverage require of me now?
- Which repayment claims may cut into the money I receive?
Give written notice first
Before you accept the other driver’s offer, send your insurer written notice that the limit is low. [3]
Sources and further reading
- 1Texas Department of Insurance, insufficient liability limits
- 2Washington insurance commissioner, underinsured driver guidance
- 3Washington insurance commissioner, notice before settlement
- 4Centers for Medicare and Medicaid Services, conditional payments
This is general education on motor vehicle injury law. Underinsured motorist rules depend heavily on your state and your policy. Get local legal advice before you sign a settlement for a serious injury.
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