Auto accident settlements often exceed policy limits in serious injury cases where the total compensation goes beyond the at-fault driver’s coverage. This pertains to cases involving multiple insurance policies, underinsured motorist coverage, or additional liable parties.
You might be wondering what happens when someone’s injuries cost far more than the amount of available insurance coverage. When you speak with a South Carolina car accident lawyer, your attorney can help you fully understand how policy limits actually work.
Your legal counsel can also advise you as to whether or not other coverage applies and what options exist when the total amount of damages surpasses the first layer of insurance. With a lawyer by your side, you can make sure you explore all settlement options in your case.
How Auto Insurance Limits Shape the Starting Point of a Case
When answering the question, “How often do auto accident settlements exceed the policy limits?” it’s important to understand South Carolina laws regarding auto insurance.
By law, every driver is required to carry minimum liability insurance. While this is good in many ways, it’s also detrimental in the sense that these minimums have not been updated or adjusted in response to modern-day costs of medical care.
As a result, many auto accident settlements end up exceeding policy limits when the victim’s injuries require more compensation than the policies can accommodate. With that in mind, here’s what the baseline level of coverage looks like in South Carolina:
- $25,000 for bodily injury per person
- $50,000 for bodily injury per accident
- $25,000 for property damage
Many drivers stick with these minimums because they’re cheaper, but that leaves victims in difficult situations. For example, an ambulance ride, ER visit, and imaging appointment can reach upwards of $20,000 before any ongoing treatment even begins.
When injuries extend past that—such as fractures, surgeries, or spinal trauma—the minimum policy barely scratches the surface. Even so, the at-fault driver’s insurance company treats its policy limit as the ceiling unless something pushes the claim past those boundaries.
That’s why cases that involve catastrophic injuries or clear negligence tend to run up against the limits quickly.
Why Some Claims Surpass Policy Limits
Exceeding the policy limits doesn’t happen in everyday fender-benders. It occurs in specific situations where the facts create additional avenues for compensation.
Victims often don’t realize how these exceptions apply until someone reviews the details of their case. Let’s take a look at common instances where settlements exceed the policy limits after auto accidents.
Multiple Insurance Policies Apply at the Same Time
More than one policy can cover the loss depending on the circumstances of the crash, such as when:
- The at-fault driver was operating someone else’s vehicle
- The driver had access to an employer’s commercial policy
- A business owned the vehicle
- A household policy extends coverage
When stacked together, these policies can increase the amount of recovery available to you. In fact, this is a frequent way in which total compensation exceeds a single policy limit.
Uninsured or Underinsured Motorist Coverage Steps In
South Carolina requires uninsured motorist coverage and strongly encourages underinsured motorist coverage (UIM). Many drivers purchase UIM without fully understanding what it does, but these coverages protect you when the at-fault driver doesn’t carry enough insurance.
UIM can bridge the gap between the at-fault driver’s low policy limit and the actual value of your losses. That makes UIM a common reason why total settlement amounts surpass the other driver’s limit.
For example, let’s say the at-fault driver has $25,000 in coverage, and your UIM policy adds another $100,000. Together, your potential recovery subsequently increases to $125,000.
The At-Fault Driver’s Conduct Was Egregious
When a driver behaves recklessly by driving while drunk, engaging in street races, or fleeing a scene, South Carolina state laws allow victims to pursue punitive damages, though it all depends on the exact circumstances of your situation.
Punitive damages are designed to punish extreme misconduct, and insurance policies don’t always protect the driver from personal exposure. If a jury awards punitive damages, the amount may exceed policy limits.
That said, some insurance policies exclude punitive damages entirely, leaving the driver personally responsible.
A Third Party Contributed to the Collision
More than one party can share fault, including:
- A company that failed to maintain a commercial vehicle
- A manufacturer that produced a defective tire or braking system
- A construction contractor who created a dangerous roadway condition
When multiple parties contributed to the crash, each one may have its own insurance policy. In turn, these cases often produce settlements far beyond the at-fault driver’s individual limit.
South Carolina’s Comparative Fault Rules and Their Influence on Larger Settlements
South Carolina follows a modified comparative negligence system. This means a victim can recover compensation as long as they are less than 51% at fault for the crash that caused their injuries. From there, their recovery will be reduced by their percentage of responsibility.
This rule influences whether a case can exceed policy limits. When an injured person clearly bears very little fault for the incident, the insurance company has less room to argue fault, like in these examples:
- Being hit as a passenger
- Getting struck while waiting at a red light
With liability clearly assigned to the person they insure, these companies will sometimes agree to tender the full limits quickly to avoid a claim escalating into something much larger. In severe injury cases, insurance carriers often know the medical expenses alone far exceed their policy limits.
In these scenarios, the evidence of fault puts them at greater risk if the case proceeds toward litigation, which they would prefer to avoid. This dynamic is one more reason limits are sometimes surpassed when additional coverage sources exist.
What Happens When the Policy Limit Clearly Falls Short
When the total cost of damages is far greater than the available coverage, insurance companies sometimes offer the full limit early. They do this when they fear the claim will grow if they refuse to pay from the beginning.
After that point, the victim’s options usually depend on whether:
- UIM coverage exists
- Multiple defendants are involved
- The driver’s employer has coverage
- Punitive damages apply
- A personal judgment against the driver is realistic
It can feel overwhelming when your bills exceed the policy limit before you’ve even reached maximum medical improvement. Many victims in South Carolina are surprised to learn they have coverage through their own household policy, which they didn’t realize applied.
Call Us to Learn More About How Often Auto Accident Settlements Exceed the Policy Limits
When your injuries cost more than the at-fault driver’s insurance coverage, you might feel like you’re out of luck. As overwhelming as this thought can be—especially if you’re still trying to recover physically and emotionally—there’s still hope when you call Shelly Leeke Law Firm.
We can handle all kinds of commercial or multi-policy situations. Instead of being forced to settle for less, we’ll fight for an amount that reflects what you’ve been through.
With more than 10 years of combined experience, we’ve recovered over $6 million for our clients. We know local nuances matter, and even though South Carolina allows stacking in ways many victims aren’t aware of, our highly-informed analysis will ensure you’re advised of all your options.
