It’s an unfortunate reality of life: auto accidents. The experience is traumatic and emotionally upsetting whether you’re a driver or passenger. 

But what happens when the costs associated with an accident exceed your insurance policy limits? How often does this happen, and how should you prepare for it beforehand? 

This article will explore these questions and more as we examine how often auto accident settlements exceed policy limits.

Factors That Determine a Settlement Amount

Two major elements that influence an auto accident settlement are (1) the severity of damages and (2) any injuries resulting from the crash. 

Other contributing factors include state laws, insurance coverage, applicable time frames for filing claims, and previous court verdicts in similar cases. Insurance companies may also consider the legal fees associated with pursuing or defending against such claims. All these components will be considered when determining a fair settlement amount for an auto accident case.

When assessing your potential payout after an automobile accident, it’s essential to consider the average policy limits for car insurance since this could limit your maximum compensation from a claim.

Average Policy Limits for Auto Insurance

When it comes to auto insurance policy limits, many people think of a fixed number that’s set in stone. But the reality is much more complex. Just as every car accident is unique, so is the coverage for each situation.

Take the story of Joe and Sarah – two drivers involved in an accident on the highway. When they found out their policy limits after settling the case, both were surprised at how different they were from one another.

Joe opted for higher liability coverage than Sarah, who only chose minimums – resulting in very different settlements for them post-accident. This anecdote illustrates that when it comes to auto insurance policies, there’s no one size fits all approach. Everyone has different needs and should research what will best serve them before purchasing a policy.

In short, policy limits can vary widely depending on factors like age, location, and type of vehicle being insured. However, most states require certain base levels of protection, typically between $25K – $50K per person or more, depending on the state laws. With this knowledge, you can make better decisions when selecting an appropriate level of coverage for yourself.

How Common Are Auto Accidents That Exceed Insurance Policy Limits?

Inquiring minds often want to know – how common are auto accidents that exceed insurance policy limits? It’s a pertinent question, especially for those in an auto accident and in the unfortunate position of needing more money than their policy offers. So, just how frequently do auto accident settlements go beyond what’s covered by insurance policies?

Considering the prevalence of car accidents on today’s roads, it is no surprise that there are many cases where damages exceed coverage limits. The exact frequency can vary depending on location, the severity of the incident, and even consumer behavior. As such, some estimates suggest that a large percentage of claims may involve payment amounts higher than the policy limit. 

While not every settlement will break through the upper bounds of an insurer’s financial commitment, this scenario does happen quite often.

Legal and Financial Implications of Exceeding Insurance Policy Limits

Were you in an auto accident where the costs of damages exceeded your insurance policy limits? If so, did you know that there are legal implications? As we explore what those consequences could be, it’s important to understand how common these types of accidents are.

When a car accident results in property damage or bodily injuries exceeding the policy limits, they may face some tough legal issues. Depending on their state and the severity of the incident, at-fault parties can face fines or even prison time. 

Even if no one is hurt during such an event, drivers may still find themselves liable for uninsured losses. You must stay aware of potential risks before getting behind the wheel! Understanding both sides of the law regarding exceeding insurance policy limits is key to protecting yourself.

Strategies for Negotiating a High-Value Settlement

Statistics show that the average auto accident settlement is between $10,000-$25,000. With this in mind, it’s important to understand how to negotiate a high-value settlement when an insurance policy limit has been exceeded.

When negotiating a higher value than the insurance policy provides, some strategies may help secure a larger payout. One of these is to work with an experienced personal injury lawyer, as they can identify any potential legal loopholes and advise on the best course of action. 

Additionally, gathering evidence such as medical records or witness statements can strengthen your case and improve your chances of getting a favorable outcome. You should also consider other forms of compensation besides money, such as future medical care or new transportation. These non-monetary types of settlements can provide additional benefits not available through traditional cash payments.

Knowing negotiation tactics and understanding both sides’ interests can often lead to mutually satisfactory results during settlement discussions. By presenting relevant facts backed up by solid evidence, you have the best chance of securing equitable compensation even if it exceeds the policy limits.


Auto accident settlements that exceed insurance policy limits are more common than you think. The average policy limits for auto insurance generally don’t provide enough coverage to cover all costs associated with an accident.

Overall, while there is no guarantee that an auto accident settlement will exceed the policy limits, knowing these key factors can help you protect yourself if you are in a similar situation. Ultimately, getting the compensation you deserve starts with a consultation with our team at today.