Does auto insurance pay over the limit of bodily injury to settle lawsuits?

Being in an auto accident is awful, but the lawsuit that can follow is even worse. It’s scary to think of someone suing you. You worry you might lose your home or have your wages garnished if you lose the lawsuit, so it’s fortunate that car insurance does cover lawsuits in many situations.

If you lose a lawsuit, your bodily injury liability insurance pays up to a certain amount, though not over the limit of bodily injury on your policy. Your insurance company also typically pays for all court costs, including hiring an attorney. The company will also try to go through an arbitrator first to settle the case quickly. The process can be stressful, but your insurance company works on your side. Understanding how insurance claims work can help you understand what your insurance company will do for you when you make a claim.

If the person suing you wants more than what’s covered by your insurance policy, here are some tips on what to do.

How does car insurance cover lawsuits after an accident?

After an accident, the other party in an accident may sue you for their injuries. This is especially true if the officer on the scene decides it’s your fault. Your insurance company will try to limit the damages. The company wants to avoid a trial and settle the case out of court, if possible.

Your Insurance Company Provides You With an Attorney

Your insurance company usually has a lawyer on retainer. This attorney represents you at all court appearances. It’s in your best interest to cooperate with this professional as much as possible.

Make copies of all the legal documents you’ve received and forward those documents to your attorney right away. Attach your auto insurance policy number to the documents along with your name and phone number. The attorney may need to contact you.

If you’re served with a subpoena or other legal document, contact your attorney right away. Your attorney has to respond to these documents within a certain amount of time. Missing a deadline could hurt your case.

If anyone from the opposing party contacts you, refer them to your attorney and don’t speak to them. Do nothing on your own. Your attorney has experience in these matters, so let your handle all matters.

If You Don’t Like Your Attorney

You might feel your attorney isn’t qualified to handle your case. You can hire a different attorney, but you’ll have to pay the legal costs yourself.

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Does car insurance cover lawsuits if you’re sued for more than the limit?

Your insurance company will only pay up to the bodily injury limit specified in your policy. If the person suing you demands more than that amount, that person can sue you personally for it. That’s why it’s important to make sure you have the right auto insurance before you’re involved in an accident.

The Burden of Proof Is on the Complainant

When someone sues you for more than the insurance company is willing to pay, they have to provide evidence that they’re entitled to that money. Unfortunately, there’s no limit on the amount of money a complainant can demand. Fortunately, a jury hears the case, and proving a need for more money is easier said than done.

What do you do if you believe you’re not responsible?

If you believe you’re not responsible for the accident, it will be up to you to prove your innocence:

• Contact the reporting officer and ask for a meeting. 
• Request a copy of the accident report. 
• Gather all the evidence.
• Get photos from the scene of the accident as well as statements from other witnesses.

Be careful to document everything. It will be up to you to prove your innocence to the court.

What happens if you lose?

Sitting through a trial when you’re the defendant can be devastating. It’s worse when you lose and you’re responsible for whatever your insurance company doesn’t pay with your liability insurance coverage.

Fortunately, there should be a fair and impartial judge presiding over your case. The judge will review your financial status and situation at home before making any decisions on how to recover that extra money.

Beware of Scare Tactics

The lawyers representing the other side may try to scare you, hoping you’ll give them the money you owe. They may threaten to seize your home or garnish your wages.

Keep in mind that it’s rare for a court to pass an order to garnish your wages. Usually, it is only done if the government is trying to recover taxes or if you’re behind on child support payments.

That isn’t the case with a lawsuit over a car accident. A judge will usually be more lenient in such cases. This is especially true if you’re a single parent or guardian making a low income and supporting children at home.

If down the road, you get a pay increase of a certain amount, the court may reconsider the issue, and you’ll then have to make payments.

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What should you do if you’re sued for more than your auto insurance payout limit?

If someone sues you for more than your insurance policy covers, contact both your insurance company and your appointed attorney as soon as possible. They’ll give you the information you need for the best way to proceed and what you may be liable for. For more information, you can contact an independent attorney, but you’ll have to pay for that out of pocket.

Being involved in a lawsuit is stressful and expensive. Protect yourself by contacting your insurance company as soon as you learn of a lawsuit. Getting legal representation as soon as you can protect you from further loss.

Get proactive now, before you get sued. You can buy auto insurance online, but make sure to talk to your agent and find out what lawsuit coverage is included.

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