How to Collect Personal Injury Damages Exceeding the Insurance Policy Limit

How to Collect Personal Injury Damages Exceeding the Insurance Policy Limit

People have basic knowledge of insurance, but only a few understand the concept. Insurance is a guarantee of protection from any financial loss. It is a kind of risk management used primarily to hedge against any danger or uncertainty in connection with contingent liability and loss. Insurers, agents of an insurance company, or any business carriers of this kind provide that guarantee or risk management. Any person who avails or buys an insurance plan is referred to as policyholder.

The transaction works in such a way that the policyholder pays a certain amount in a specified duration of time to the insurance company, and in return, the insurer compensates the policy owner when a loss occurs. Compensation may be in the form of financial assistance or other services, provided the calculation must be within the insurable interest the policyholder purchased. The policyholder receives a contract instead of the agreed payments made to the insurance company wherein the terms and conditions between two sides are detailed.

When applying the requirements of the insurance company in cases of personal injuries caused by any accidents, the insurance company is obliged to undertake financial expenditures for the policyholder as specified in the contract.

When a personal injury occurs, insurer assumes full responsibility to premise liability, which ranges from car claims to medical treatments and other related expenses. The representation of an insurance company includes legal fees and damage cost of the award which should be in lieu of a court’s decision.

One main thing we should focus on in this issue is if the claim exceeds the limits of the policy of the insured. If that’s the case, can the aggrieved party still claim beyond the limit?

Here are some legal precepts we can share regarding the matter.

When a person purchases a liability insurance, there is a standard limit or maximum amount of coverage set forth by the insurer. That is the extent of the amount an insurance company can award to a claimant. Take, for example, an individual buys a car insurance that has a $100,000 limit, the specified amount is the maximum they can award the policy owner. If the claim is more than $100,000, say $150,000, the exceeding amount will no longer be covered. However, if a jury or judge decides to award the amount, the insurer is forced to source the excess amount from other means.

The plaintiff can collect any excess claims even if the policy limits of the insurance have been exhausted. The claimant can drag a lawsuit against added defendants. He or she can also utilize an umbrella insurance policy for recovering. There is also the option to demand from the responsible personally party.

The correct method for an insurance claims recovery will rely on what options are made available to the claimant. Let us study the following three choices.

Additional Defendants Lawsuit

In some cases, other parties can also be held accountable and financially responsible for the personal injury. If two respondents each has a policy limit of $50,000, both of these respondents can use their plan to pay the excess award of the claimant. We can refer to them as multiple defendants.  Some examples are:

Cases of  Medical Malpractice: If two medical professionals collaborated and breached their duty, each one of them can be considered a defendant.

Cases of Product Liability. When a defective part or the product as a whole has caused personal injury, the claimant can sue both the retailer and distributor.

Liability Cases On Vicarious Situations – When an employee ordered by his employer caused an accident at work, both can be held liable for the casualty.

The Umbrella Policy

Insurance companies, particularly the big ones, have fall-back policies they call an umbrella policy. It refers to multiple insurance companies under a single conglomerate that is over and above all other insurance groups.

The umbrella policy pays for the excess that the limits of individual policies can no longer cover. For example, a defendant only has a $100,000 policy, but there is an excess of $50,000, the umbrella policy takes care of the $50,000.

While large corporations have this umbrella policy, there are also private individuals who enjoy such plans. So if you are a lawyer representing a defendant or a claimant, it is best you do a little homework and dig into some details about this.

Doing the collection Personally from the Defendant

What is unfortunate to some claimants is when the respondent has neither an umbrella or individual policy to address a lawsuit. The last recourse of the plaintiff is to collect the award from the respondent personally. The problem with this is if the defendant has no assets or cash to pay for the excess limits of the policy. If that is the case, the claimant’s option is going to court and seek an order from the judge to put a lien on the properties of the defendants.


The defendant must realize that if a personal injury occurs because of him, a personal liability to the claimant is by law mandatory. If the insurance company who insured the defendant did not settle the damage within the policy limits, then the insurance company will be held accountable for the total amount of damages that resulted from a judge verdict.

In cases when the claimant agreed to settle but the insurer did not, then the insurer will be required to pay the entire damages including the amount exceeding the limits of the policy.

Therefore, in handling cases of how to collect claims for personal injury damages, the lawyer must have firsthand information especially on matters regarding the awarding of claims.






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Laura Kent is a fervent writer who writes for Stokes Injury Lawyers. She enjoys reading anything about law. A writing eagle in the morning and a reading owl by night. She is a graduate of Journalism and specializes the principles of creative advertising.

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