What Happens When a Car Accident Exceeds Insurance Limits in Texas

Understanding the nuances of a car accident settlement in Texas is crucial, especially when the insurance settlement amount is insufficient to cover all damages. This guide delves into the complexities of settlement insurance claims and the repercussions when a policy limits settlement is exceeded, highlighting the maximum insurance payout for car accident scenarios and the legal options available to those affected.

Understanding Auto Insurance Policy Limits in Texas

In Texas, the law mandates that all motorists carry minimum liability insurance, commonly referred to as the ’30/60/25′ coverage. This liability insurance includes $30,000 for bodily injury per person, $60,000 for bodily injury per accident, and $25,000 for property damage. Drivers have the discretion to purchase additional coverage beyond these minimum liability thresholds to safeguard against potential financial risks.

Rare Occurrence: Exceeding Policy Limits in Auto Accident Settlements

It is important to note that settlements exceeding policy limits are relatively rare. Insurance companies typically pay up to the policy limits for an at-fault driver involved in a car accident. However, there are instances when an accident victim’s damages surpass the insurance coverage, prompting the question of how often do auto accident settlements exceed the policy limits, and leaving them with unpaid medical bills and additional costs.

Suing the At-Fault Driver for Additional Compensation

When a settlement exceeds the policy limits, Texas law allows the victim to pursue the personal assets of the at-fault driver. However, it’s important to consider that collecting compensation from personal assets can be challenging, as certain assets are exempt from seizure to satisfy a judgment. Primary residences, cars, wages, and personal belongings are generally protected from collection, which may influence when an insurance company offers settlement.

Suing Additional Parties for Compensation

In cases involving major accidents, there may be multiple parties at fault. It is crucial to explore the possibility of suing additional parties, such as employers or manufacturers, who may share liability for the damages. For example, if the other driver was operating a company vehicle or if there was an auto defect or malfunction, these third parties could potentially be held responsible for compensation, which could affect a hit by a company vehicle settlement or invoke product liability claims.

Reviewing Personal Insurance Coverage

If the negligence of the at-fault driver is not fully covered by their insurance policy, the accident victim may be able to turn to their own insurance coverage for additional compensation. Two types of coverage that can be particularly relevant in such cases are Personal Injury Protection (PIP) and Underinsured Motorist Coverage, which also includes benefits for those hit by an uninsured motorist.

Personal Injury Protection (PIP)

Personal Injury Protection (PIP) insurance covers medical expenses, lost wages, and other costs resulting from a car accident, regardless of who is at fault. In Texas, drivers are required to carry at least $2,500 of PIP coverage, although higher coverage options are available for additional financial protection, enhancing personal injury claims.

Underinsured Motorist Coverage

Underinsured Motorist Coverage provides compensation for injuries caused by drivers who either lack insurance or have insufficient coverage to fully compensate for the damages. This coverage can be crucial when the at-fault driver’s insurance is inadequate to cover all the losses sustained in the accident, potentially leading to an insurance claim.

The Stowers Doctrine and Bad Faith Insurance Practices

The Stowers Doctrine, a legal principle in Texas, comes into play when insurance companies refuse a reasonable settlement offer within the policy limits. If a jury subsequently awards compensation beyond the policy limits, the insurance company may be held liable for the entire verdict. This means that both the insurer and the defendant could be responsible for paying the excess amount.

The Importance of Hiring a Texas Car Accident Lawyer

Navigating the complexities of auto accident settlements that exceed policy limits requires the expertise of an experienced car accident lawyer. Insurance companies often try to pressure accident victims into quick settlements, but accepting such offers prematurely can result in lost opportunities for additional compensation. A skilled lawyer can protect the victim’s rights, ensure a fair evaluation of their case, and negotiate or litigate to secure the necessary compensation, even if it exceeds the negligent driver’s policy limit. When searching for the best auto accident lawyer near me, it’s important to consider their legal strategy and track record for providing sound legal advice.

The Law Office of Arturo Martinez, PC: Your Trusted Personal Injury Lawyer in McAllen, Texas

If you have been involved in a car accident that exceeds insurance policy limits, seeking legal representation is crucial to protect your rights and secure the compensation you deserve. The Law Office of Arturo Martinez, PC, is a reputable personal injury law firm in McAllen, Texas, committed to fighting for accident victims’ rights. With a track record of achieving the best results for our clients, we offer a free case evaluation to assess the details of your situation. Serving McAllen, Pharr, and neighboring communities in the Rio Grande Valley, we are here to guide you through the legal process and advocate for your best interests as your dedicated injury attorney and accident attorney.


Car accidents that exceed insurance policy limits can have severe financial implications for accident victims. Understanding the legal options available in Texas is essential for pursuing a fair compensation claim. While exceeding policy limits is rare, it is important to consult with a skilled personal injury lawyer who can navigate the complexities of your injury lawsuit and ensure your rights are protected. If you find yourself in such a situation, reach out to a trusted injury attorney to assess your options and pursue the injury claim you deserve.

Remember, the Law Office of Arturo Martinez, PC, is here to help. Contact us today at (956) 781-6203 for a free case evaluation and let us fight for your rights as your trusted personal injury lawyer in McAllen, Texas, and handle your legal complaint.