What Happens If You’re Sued for More Than Insurance Covers?

If you were responsible for a car accident in Nevada, the victims might bring a lawsuit against you to receive compensation for their damages. Facing a lawsuit can be emotionally and financially stressful, especially if the victim sues you for an amount that’s more than your insurance policy limit. If you found yourself in this situation, you might wonder how you could defend yourself in court and what happens if you end up owing more than what your insurance company covers.

Fortunately, our legal team at De Castroverde in Las Vegas, Nevada, is here to help. This guide tells you everything you need to know about being sued for more than your policy limit after an accident. If you need expert legal representation for your case, be sure to contact our personal injury and accident firm today.

Can Someone Sue You for More Than What Your Insurance Covers?

If a victim is suing you for more than your insurance covers, you might wonder if their lawsuit is even valid. It’s important to know that Nevada is an at-fault state, meaning that at-fault parties and their insurance companies are legally obligated to pay victims for car accidents and personal injury cases. Even if the victim’s damages exceed your insurance coverage, you’re ultimately responsible for payment.

Consider an example where a driver causes a car accident in which the victim sustains $110,000 in damages. The at-fault driver can get their insurance company to cover up to their policy limit of, say, $50,000. The at-fault driver would then be personally responsible for any remaining damages over their insurance limit, in this case, the remaining $60,000. It’s important to realize, therefore, that the victim can sue for whatever their damages are, even if the amount exceeds the at-fault party’s coverage.

Determine How Much Insurance Coverage You Have

When you receive notice of a car accident or personal injury lawsuit, it’s important to determine how much insurance coverage you have. Knowing your insurance policy limits helps you understand whether you’re able to pay the victim if you lose the lawsuit. Nevada requires the following minimum coverage for all drivers:

  • $25,000 in bodily injury per person.
  • $50,000 in bodily injury per accident.
  • $20,000 in property damage.

Unless you failed to comply with state law, you’ll have these minimum coverages in your policy. You may have even more coverage if you opt for a more comprehensive policy. If you’re unsure of your policy limits, be sure to contact your insurance company to check this out.

Investigate Umbrella Policies

An umbrella policy provides coverage if your primary car insurance limits are less than the victim’s damages. For instance, imagine that you have $50,000 in car insurance coverage and a $50,000 umbrella policy. Together, these policies would pay $100,000 of a victim’s $110,000 in damages. You would only be personally responsible for $10,000 instead of $60,000 if you didn’t have the umbrella policy. Umbrella policies are most common among corporations, but you can purchase one as a private individual. Be sure to hire an expert attorney to see if any extra insurance policies apply to your situation.

Know the Other Party’s Options

When a victim has to pay thousands of dollars in damages, they’ll likely consider various options to ensure they receive compensation. Being aware of the action they might pursue can help you prepare for your case. For instance, it’s important to understand that a victim might have uninsured and underinsured coverage. This insurance policy is optional in Nevada but allows the victim to seek compensation in the amount that exceeds your policy limit.

Another way a victim might try to maximize their compensation is by suing multiple parties. They’re more likely to receive the full amount they request if they split the cost among several defendants. If there are other defendants in your lawsuit, it could help you reduce the total amount you owe if a court finds you liable.

Be Aware of Bad Faith Insurance Companies

An insurance company acting in bad faith uses dishonest practices to avoid its contractual obligations to policyholders. For example, an insurance provider might neglect to inform you that the victim wants to settle their claim for an amount within your policy limits. If a court finds your insurance company guilty of this dishonesty, the company might be liable for the damages of your lawsuit.

Settle if Possible

A victim might try to settle their claim to avoid court and obtain a more predictable outcome. Ask your insurance company if the victim has made a demand and for how much. If you want to settle, make sure to let your insurance company know. This course of action is especially beneficial if it’s within your policy limit, as your provider will have to cover the full amount.

Prepare for a Personal Lawsuit

Most victims avoid personal lawsuits because of the hassle and cost. Additionally, it’s unlikely that the defendant will have enough money or assets to cover the full damages. Regardless, if the victim exhausts all other routes and thinks they can collect enough compensation from your assets, they might file a personal lawsuit. Here are some tips you can use to prepare for this scenario:

  •  Hire an attorney: The costs of hiring an attorney are well worth the expert legal representation you’ll receive.
  •  Don’t ignore the lawsuit: It’s best to address the lawsuit immediately, as ignoring it can lead to a default judgment where the court allows the plaintiff to seize your assets.
  •  Consider personal jurisdiction: Before you file an answer to the claim in which you admit or deny the allegations against you, consider the personal jurisdiction argument. This argument may be valid if the plaintiff is trying to sue you out of state or somewhere else where you don’t think the court should have power over you.

Being sued in excess of your insurance coverage can be scary, but remember that there is hope for your case. The victim may end up receiving their demanded compensation through other means. You can also hire an expert legal team to protect yourself and your assets. If you’re in the Las Vegas, Nevada, area and need advice specific to your case, don’t hesitate to contact De Castroverde Law Group today.

 

Photo Credits: Car-accident by https://ultrabem.com is licensed with Public Domain Mark 1.0