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What if car insurance can’t cover the costs of a wreck?

On Behalf of Bennerotte & Associates, P.A.

Feb 18, 2024

Auto/Motor Vehicle Accidents

Some people panic after getting into a car crash. Others immediately rush to the conclusion that they have very minimal risk. After all, drivers in Minnesota typically need to carry liability insurance. It is only natural to presume that someone hurt in a collision can rely on insurance coverage to pay their medical bills, repair their damaged vehicles and even reimburse them for lost income.

Unfortunately, there are scenarios in which insurance can’t mitigate the costs generated by a crash. Sometimes, the driver who causes a wreck has allowed their policy to lapse. Their insurance provider might then refuse to pay for any losses the other parties involved suffered. Other times, a driver has a policy with relatively low limits.

Even if an insurance company pays out the full value of the policy, the people affected by the crash may still have major expenses to address. What happens if there isn’t enough insurance to cover the cost of a crash?

Many cases go to civil court

When one driver does not have enough coverage to mitigate the liability inherent in operating a motor vehicle, they could end up personally financially responsible for the losses that other people incurred. Provided that there is evidence corroborating someone’s claim that another driver was negligent while driving or clearly violated traffic statutes, they could initiate a lawsuit in civil court.

Personal injury and wrongful death lawsuits can provide financial compensation for those negatively impacted by a crash where insurance cannot cover all of the losses generated. The courts can award plaintiffs compensation well beyond what insurance could cover provided that they have documentation of their losses and evidence that the other driver is at fault for the collision.

Some drivers use their supplemental insurance coverage

Many people carry more insurance than the minimum required by the state. Uninsured and underinsured motorist coverage is among the most popular types of supplemental protection because people understand that someone with bad insurance or no policy could put them in the hospital.

Sometimes, people can use their uninsured or underinsured motorist coverage after a crash where they are not at fault. However, doing so does come with certain risks, including the likelihood of increased policy premiums in the future. In other words, the party that needs coverage ends up absorbing the cost even though they are not at fault for the crash.

All things considered, going to court could be the preferable solution for someone who has major crash expenses but little or no personal responsibility for the collision that caused their harm. Seeking legal guidance is a good way to arrive at informed, personalized solutions.