What Happens if Medical Bills Exceed Policy Limits?

If medical bills exceed the policy limits after a car accident, the injured party may have to cover the remaining costs. Once the insurance company pays out the maximum amount allowed by the policy, as the injured victim, you may need to pay any additional medical expenses out of pocket. However, you might also have other available options.

In some cases, you may recover the extra costs by filing a lawsuit against the at-fault driver, but this depends on the driver’s financial situation and assets. You could use your own insurance policy or other resources to help cover the remaining bills. An experienced Raleigh car accident lawyer will review your options for compensation.

Understanding Insurance Policy Limits

Insurance policy limits refer to the maximum amount an insurance company will pay for a claim under a specific policy. These limits are set when the policy is purchased and are usually divided into two parts: per person and per accident.

The per-person limit is the maximum amount the insurer will pay for injuries to one person in an accident. In contrast, the per-accident limit is the total amount they will pay for all injuries or damages in a single event. If damages or medical expenses exceed these limits, the policyholder is responsible for covering the difference.

Liability Insurance

States like North Carolina require all local drivers to have continuous liability insurance. State law (G.S. 20-309) mandates that these policies must be issued by a company licensed to do business in the state.

This type of auto insurance helps cover the costs associated with injuries and damages the policyholder may cause to others in an accident for which they are at fault. It typically consists of two main components: bodily injury liability and property damage liability.

Most states require drivers to carry a minimum amount of liability insurance to ensure that they can compensate others in the event of a crash. However, having higher liability limits provides greater financial protection against costly claims and lawsuits.

For example, North Carolina sets the following minimum liability coverage requirements:

• Bodily injury (one person): ​​$30,000
• Bodily injury (two or more people): ​$60,000
• ​Property damage: ​$25,000

Your Options if Medical Expenses Exceed Policy Limits After a Crash

A car accident can lead to catastrophic injuries with a long-term financial impact. Common car accident injuries include broken bones, head trauma, and spinal cord damage. When the cost of your past and future medical care is more than what the insurance policy covers, you need to look for alternative sources of compensation.

Underinsured Motorist (UIM) Coverage

This coverage is part of your own auto insurance policy and kicks in when the other driver’s insurance isn’t enough to cover all your medical expenses. It helps pay for the remaining costs up to the limits of your underinsured motorist coverage policy.

UIM coverage protects you from having to pay out of pocket for large medical bills caused by a driver with insufficient insurance. Check your policy to see if you have UIM coverage and what its limits are.

Umbrella Insurance

Umbrella insurance is a type of additional liability coverage that kicks in when the limits of your auto or other primary insurance policies are reached. It provides extra protection, typically in large amounts, and can help pay for medical bills, legal fees, or damages that exceed your regular policy limits.

This kind of insurance is useful in serious accidents where costs go beyond standard coverage, offering an extra layer of financial security. However, it’s important to note that umbrella insurance only applies after your primary policy limits have been fully used.

File a Lawsuit Against the Liable Party

By suing the liable party, you can seek compensation for medical expenses, lost wages, pain and suffering, and other damages. However, the success of a lawsuit depends on the at-fault party’s ability to pay. If they have limited assets or income, even winning the lawsuit may not guarantee full recovery of your expenses.

You have a limited time to take legal action against the at-fault party. For example, in North Carolina, the statute of limitations for a personal injury claim is usually three years.

Failing to file a lawsuit within the given timeframe can lead to losing the opportunity to recover all your losses. After reviewing your case, a lawyer can determine exactly how long you can file a lawsuit after a car accident.

Call an Experienced Car Accident Lawyer

If your medical bills exceed policy limits after a collision, you still have options for additional compensation. After reviewing your case, an experienced car accident attorney from our team can identify additional sources for financial recovery.

Whitley Law Firm has been representing injury victims since 1974. Over the years, we have helped many clients regain control of their lives. If you’ve been hurt in a car crash, we’ll help you fully recover your losses.

With our knowledgeable team overseeing your case, you can focus on healing and spending quality time with your loved ones. Contact us today to schedule a legal consultation if you have been seriously injured. We’ll review the details of your situation and guide you through the entire insurance claim process.