What Happens When a Car Accident Claim Exceeds Insurance Limits in Texas?
Car accidents in Texas can lead to major financial losses. If your damages go beyond what the at-fault driver’s insurance covers, you might be unsure how to handle the leftover costs. It’s important to know about the limits of auto insurance policies in Texas, the Stowers Doctrine, and additional compensation options.
At the Stewart Law Firm, we understand how truck accidents can impact you and your family. Hiring a seasoned personal injury and car accident lawyer like Stephen Stewart is crucial to securing the best possible settlement. Our firm is dedicated to defending your rights and ensuring you receive the compensation you deserve. Let us guide you through these difficult times so you know what to do.
Texas Auto Insurance Policy Limits
In Texas, the law mandates that drivers have minimum car insurance coverage, often referred to as “30/60/25.” This means $30,000 for bodily injury per person, $60,000 for bodily injury per accident, and $25,000 for property damage per accident. While this is the minimum and most affordable coverage, many drivers opt for higher limits to better protect themselves.
Apart from the basic liability coverage, which pays for damages if you’re at fault in an accident, Texas drivers can also choose from several other types of insurance:
- Additional Liability Insurance: This policy increases coverage beyond the basic limits to protect your assets in case you cause a significant accident.
- Personal Injury Protection (PIP): This type of insurance covers medical bills, including doctor appointments, lost wages, and other legal costs from injuries in an accident, regardless of who is at fault. PIP isn’t required by law but is commonly included in policies.
- Medical Payments Coverage: This is a more limited form of PIP. It only covers medical expenses for you and your passengers after an accident.
- Uninsured/Underinsured Motorist Insurance: This policy covers medical and car repair costs if an uninsured driver hits you or you’re involved in a hit-and-run.
- Collision Coverage: This type of insurance pays for your car repairs after an accident, regardless of who was at fault.
- Comprehensive Coverage: This insurance covers repairs for damage from other events, like theft or natural disasters.
While liability insurance covers damages you might cause to others, additional insurance options are available to cover your own costs in various scenarios.
What Happens If Accident Damage Exceeds Your Car Insurance in Texas
If accident costs exceed the at-fault driver’s insurance limits, the injured party can use their own uninsured/underinsured motorist coverage, sue the driver, or claim against liable parties.
In Texas, if you’re sued beyond your insurance limits, you could face personal liability and a deficiency judgment, which is the debt remaining after your insurance has been paid.
However, it’s generally unlikely to recover more than the policy limits for several reasons:
- Settlement Agreements: Typically, settling with an at-fault driver’s insurance requires the victim to waive further claims against the individual.
- Lawsuit Settlements: Suing for more than the policy limits often relies on the at-fault driver having significant personal assets, which is uncommon.
- Asset Protection: Under Texas law, most personal assets are protected from being seized to satisfy a judgment.
- Bankruptcy Discharge: In Texas, lawsuit judgments are considered unsecured debt and can be discharged in bankruptcy, meaning they are low priority in bankruptcy proceedings and might not be paid.
The main exception to these points involves the Texas Stowers Doctrine, which provides another potential avenue for claims.
What is the Stowers Doctrine in Texas?
The Stowers Doctrine is a legal rule in Texas that requires insurance companies to settle claims within their policy limits if reasonably possible. If they could settle within the policy limits but fail to do so, they might be liable for any additional costs if the case goes to court and exceeds those limits.
How Can An Umbrella Policy Help?
An umbrella policy is extra liability insurance that extends beyond your primary auto insurance limits. This policy kicks in if you’re involved in an accident and the damages surpass what your main insurance covers, providing an additional layer of financial protection.
Other Potential Liable Parties in an Accident
Texas law protects many of a defendant’s assets from being used to pay a court judgment. This type of debt is considered unsecured and can be eliminated if the defendant declares bankruptcy. However, you might still seek additional compensation from other responsible parties, such as:
- A car or parts manufacturer, if a malfunction contributed to the accident.
- A government entity if poor road conditions or inadequate traffic signals were a factor.
- The at-fault driver’s employer, especially if the incident involved a commercial vehicle like a truck or bus.
Remember, if you agree to an insurance settlement, you usually have to forgo any further claims against the at-fault party. This means you can’t accept a settlement and then sue for more damages.
How to Sue the At-Fault Party
If insurance or other methods don’t fully compensate you, consider suing the at-fault party. A Texas personal injury attorney can help you navigate the legal process to secure the compensation you need.
If the settlement is too low, you can legally challenge it in court. Suing might not exceed policy limits unless the insurer acted in bad faith. You can also sue the driver directly, though there’s no guarantee they’ll have the assets to cover the judgment.
How a Texas Car Accident Lawyer Can Help
If you’re in a car accident in Texas and the damages go beyond the at-fault driver’s insurance limits, you have several options to cover the additional costs. A reliable and experienced Texas car accident lawyer can help by answering all your queries and concerns and by offering effective legal representation to navigate these issues with you.
Contact Us at The Stewart Law Firm Today
If you’ve been injured by another driver’s negligence, you are entitled to compensation you rightfully deserve. The Stewart Law Firm serves clients throughout Austin and the surrounding areas. Contact us at (512) 326-3200 to discuss your options today!
