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Big wreck and low liability limits a bad mix


Question: My brother has over $280,000 in medical bills due to being in an auto accident. The at-fault driver’s insurance company says it will only pay out $25,000 since the driver only had state minimum limits (Indiana). This amount doesn’t cover all of his medical bills, let alone pain and suffering and lost wages. Is there any way that my brother can receive more money from the at-fault driver’s insurance company?  

Answer: If the at-fault driver that hit your brother only has $25,000 per person bodily injury liability limits, then that is most that the car insurance company will offer to pay your brother.  A person buys a certain amount of car insurance coverage, and that is all that he or she gets.  A driver is left personally responsible for damage amounts that exceed their limits.  (See “Do I have to pay if my liability limits are exceeded?”)

Situations like what your brother is in are why we strongly recommend that you carry as much auto insurance coverage as you can afford.  Higher liability limits are for when you harm others, but if you don’t have health insurance, then obtaining uninsured/underinsured motorist bodily injury and medical payments coverage is certainly also wise to do. 

For instance, if your brother has underinsured motorist bodily injury coverage, then it could help pay for bills in excess of the $25,000 that the other party’s insurance paid out – up to the limits of your brother’s underinsured motorist coverage.   In Indiana, underinsured motorist bodily injury of at least $50,000 must be offered to all drivers.  Thus, it’s likely he has this coverage, unless he declined it in writing. 

If your brother had medical payments coverage, this as well could help him pay for part of his many medical expenses – up to the coverage limits.

Once both your brother’s coverage limits (if he has any that will help pay his medical expenses) and the at-fault driver’s bodily injury liability limits have been reached, there isn’t any other money the car insurance companies will pay out to him.

If your brother has health insurance, he needs to see if it will pay.  Not all health insurance providers pay for injuries related to an auto accident, and those that do usually are secondary to any medical insurance you have on your auto insurance policy.

When all means of using insurance to pay for expenses related to an accident have been exhausted, then it’s normally time to seek legal assistance.  A lawyer can help your brother determine if it’s worthwhile to sue the at-fault party personally. 

Unfortunately, many times lawyers will find that someone that carries only state minimum coverages has no assets to go after and it isn’t worth the time or money to pursue in court.

This unfortunate situation for your brother is a reminder that it just takes one bad accident for you to end up with hundreds of thousands of dollars in expenses that you can’t afford to pay. He can talk to the finance department at the hospital; most hospitals will reduce the bill somewhat.

Choosing the right insurance coverage can make all the different.  And by comparison shopping for car insurance, you can find the best car insurance rates for coverage that doesn’t leave you as vulnerable.

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