Posted in Car Accident on June 30, 2021
Auto accident settlements exceed policy limits all the time in Colorado. When you have been injured and seek a settlement from the other party’s insurance carrier, your claim will rarely be approved without a Denver accident attorney’s assistance.
Very few insurance carriers have lawyers who work on contingency fees — meaning they only receive payment when a settlement is reached. If you don’t have a lawyer to represent you, your insurance carrier may not be willing to settle your case, even if it means pursuing collections against you for the remaining balance.
Continue reading to learn more about policy limits after auto accidents in Colorado, then contact Zaner Harden Law for personalized legal guidance.
All auto insurance policies have limits, which is the maximum amount that an insurance company will normally pay to other parties for a claim on behalf of the liable policyholder.
Those involved in a car accident in Colorado may be entitled to compensation for damages up to the limits of the liable driver’s policy. In this context, the limits are broken down into two categories: bodily injury liability and property damage liability.
Bodily injury limits may be further categorized as “per person” and “per accident.” This means that if you are injured in an auto accident, the insurance company may pay up to the “per person” limit for your medical bills, lost wages, and other expenses.
The “per accident” limit is the total amount the insurance company will pay out for all injuries, regardless of how many people were injured.
The policy limit for a particular case is determined by the amount of coverage purchased by the driver or owner of the vehicle before the accident occurred. These limits must meet the minimum requirements of the state in which the accident occurred.
Although the policyholder may choose to purchase coverage that exceeds the minimum limits, auto accident settlements still often exceed the policy limits.
For example, if your total injury-related damages are estimated at $750,000, a policy with a “per person” limit of $25,000 wouldn’t come close to covering your losses. Likewise, if another person was injured in the same accident, your combined damages could be well over the minimum required limit of $100,000 — again exceeding the “per accident” limit of the policy.
After you file a claim for compensation with the other driver’s auto insurance company, their adjuster will review your case to determine whether you’re entitled to compensation.
The adjuster will begin by assigning a percentage of liability for the accident to each involved party under Colorado’s modified comparative fault system. If the insurance company’s internal investigation suggests that the insured driver carries at least 51% of the blame for the accident, they’ll accept your claim and move forward with a settlement calculation.
To determine a settlement amount, they’ll consider the extent of your damages, including medical bills, lost wages, and how the accident is projected to affect your life in the future.
If you were partially at fault for the accident, the settlement amount may then be reduced based on the percentage of fault assigned to you. The adjuster will then compare this number with the insured driver’s policy limits.
If the estimated damages exceed the policy limits, they’ll offer you a settlement that’s less than or equal to the maximum amount of coverage available. You’re then free to accept the offer or attempt to negotiate a higher amount.
No matter how extensive a victim’s damages may be, insurance companies are generally only willing to offer settlements at or below the policy limits, even with extensive negotiations. However, this isn’t necessarily the end of the story — if your damages exceed the policy limits, you may have other options to recover the compensation you deserve.
One option is to file a lawsuit against the liable driver. Colorado’s fault-based system places responsibility for damages on the party that caused them, so you have the right to pursue compensation directly from the liable party for the amount not covered by their insurance policy.
This approach can be risky if the liable party doesn’t have enough money or assets to cover your losses, but it’s certainly worth considering.
Another potential option is to seek compensation from multiple insurance policies. If two or more other parties are liable for the accident, you may be able to collect compensation from each party’s auto insurance policy.
While one of these driver’s policies may not be able to cover all of your damages, you may still be able to collect enough money from the other policies to make up for the shortfall.
Finally, depending on your circumstances, you may be able to file a bad-faith lawsuit against the insurance company. Insurers are legally required to settle eligible claims within the policy limits, and any behaviors that indicate an insurer is intentionally avoiding a settlement could be considered bad faith.
If you bring the case to court and a judge or jury agrees with your bad-faith claim, you may be able to recover additional compensation.
If you are involved in a traffic accident where the other driver was uninsured or underinsured, then you may be able to get compensation for your injuries. The amount of the settlement will depend on the Denver car accident lawyer’s calculation of the actual damage done to your vehicle, as well as your injuries.
This may help you to recover some of your medical bills. If this accident left you unable to work, your auto accident settlement will also include your lost wages.