If you were injured in a car accident where the other driver was totally at fault, or at least 51 percent at fault, the law entitles you to collect damages from the at-fault driver. This includes compensation for your bodily injury as well as your damaged vehicle.
Generally, the other driver’s insurance policy will handle your claim for compensation. When your damages come to more than the insurance policy limits, you may have a problem.
Understanding Policy Limits
Under Arkansas law, all drivers are required to have car insurance with minimum coverage of $25,000 bodily injury for one person injured or killed in a car accident, with $50,000 total coverage for more than one injury or death that occurs in the same accident. The policy must have $25,000 of coverage for property damage.
Drivers can choose to have greater coverage and are also given the option of purchasing uninsured/underinsured motorist coverage. Coverage for personal injury protection (PIP) can also be purchased, but is not required.
It is unusual for a property damage claim to exceed the policy limits. But, if the at-fault driver has the minimum coverage of $25,000 for bodily injury, that is the maximum the insurer will pay, even if your medical costs, lost wages, and other damages exceed that amount. With some exceptions, this is generally true even if you go to court and a judge or jury awards you more than the policy limits. You will have to collect the amount over the policy limits from somewhere or someone other than the insurer.
There are a few options available to collect more than the policy limits, but you really need an attorney to help you pursue collection. It is not an easy task.
Multiple Parties May Be Sued
If the at-fault driver was driving on behalf of an employer, you may also sue the employer under a legal theory of respondeat superior, which means employers are responsible for the negligent acts of their employees.
If there were other drivers who were involved, you need to file a claim against each one since each one will be responsible for paying a percentage of your injuries based on the percentage of fault legally assigned them. This may be enough to make up the shortfall.
Collecting from Your Own Insurer
If you chose to have underinsured motorist coverage, or PIP coverage, you may collect from your own insurer. You will only be able to collect up to the limits of the amount of coverage you chose to purchase.
Searching for an Umbrella Policy
It is possible for a driver to have an umbrella policy, which is insurance that will pay for damages that exceed the amount of coverage provided by the first policy. Your attorney will know how to get this information.
Collecting Personally from the At-Fault Driver
You may sue the at-fault driver personally for the amount of your damages that exceeds the driver’s policy limit. This is only a smart choice if the driver has any assets. There is no point in going to court if the driver has no money and no property so will not be able to pay you no matter how much of an award a judge or jury gives you.
If a driver does have property or significant wages, and you get an award at trial, you may be able to garnish the driver’s wages or put a lien on his or her property so it cannot be sold unless you are paid out of the proceeds. Your lawyer will be able to investigate and determine if suing the driver personally is worth the time, effort, and expense.
Bad Faith Lawsuits
If you have made a demand of the insurer to pay you the policy limit for your injury, and the insurer refuses to pay that amount, the company may be liable for the total amount of your damages. It is up to the at-fault driver (defendant) to sue his own company for bad faith in refusing to pay the policy limit, so now, the at-fault driver may be expected to pay the total amount of your damages. If the defendant wins, the insurer may be ordered to pay the full amount of your damages.
Anytime you suffer a personal injury from a car accident, you need the help of an attorney. Dealing with insurers is not easy. What is easy is for insurers to take advantage of you and not pay you all the damages to which you are legally entitled. This is particularly true when your injuries exceed the policy limit. If this has happened to you, or you are concerned it might happen, contact one of our Arkansas attorneys at the Law Offices of Alan Levar, Injury Lawyers. We serve all those in Arkadelphia, Texarkana, Little Rock, Conway and Hot Springs and we provide a free consultation.