What Happens if the Value of your Medical Care Following a Car Accident is Greater than the available Insurance?
“(An) …insurance company must in good faith view the situation as it would if there were no policy limit applicable to the claim.” 67 Harv.L.Rev. at 1148. “The fairest method of balancing the interests is for the insurer to treat the claim as if it were alone liable for the entire amount.” Brown v. United States Fidelity and Guaranty Co., 314 F.2d 675 (2nd Cir., 1963); citing Bell v. Commercial Ins. Co., 280 F.2d 514, 515 (3d Cir., 1960) and See Keeton, 67 Harv.L.Rev. at 1144-45.
When you’re getting a car insurance quote, it’s very important to consider whether your policy’s liability limits are high enough to pay for damages if you’re held responsible for an auto accident. Buying coverage that meets only your state’s minimum liability requirements may not be enough to adequately protect your assets. If you are judged to be responsible for a serious accident, you could be required to pay out hundreds of thousands of dollars for bodily injuries and property damage, regardless of the limitations of your policy.
If you cause an accident and the victim’s attorney sees an opportunity to collect money, you could face years of unpleasant legal maneuvering, a damaged credit rating and even bankruptcy. The purpose of liability car insurance is to provide financial and legal protection following your at-fault accidents. If you are underinsured, your savings and future earnings could be at risk. Instead of moving on with your life after a terrifying accident, you could spend years reliving the experience as you struggle to pay for damages that weren’t covered by your auto insurance.