What Happens When Car Accident Claim Exceeds Insurance Limits in Florida?

In Florida, all drivers are required to carry auto insurance. The insurance must include personal injury protection (PIP) coverage and property damage liability (PDL) coverage. PIP coverage covers bodily injuries and medical bills, while PDL coverage compensates for damages caused to another person’s property, including their vehicle.

When a car accident claim exceeds the insurance limits in Florida, it typically means that the at-fault driver’s insurance coverage is insufficient to fully compensate the injured party or parties for their losses. In such cases, several possible scenarios can unfold:

1. Negotiation: The injured party and their attorney may negotiate with the at-fault driver’s insurance company to reach a settlement that exceeds the policy limits. The credit will demonstrate the extent of the damages and the potential for a larger award through litigation.
2. Underinsured Motorist Coverage: If the injured party has underinsured motorist (UIM) coverage as part of their own insurance policy, they may be able to file a claim with their own insurer to seek additional compensation. UIM coverage provides protection when the at-fault driver’s insurance is insufficient to cover the full extent of the damages.
3. Lawsuit against the At-Fault Driver: If the negotiation process does not yield a satisfactory outcome or the injured party does not have UIM coverage, they may file a lawsuit against the at-fault driver seeking compensation beyond the insurance limits. The claimant would need to prove the other driver’s negligence and the extent of the damages suffered.
4. Asset Protection: The at-fault driver can try to protect their assets in anticipation of a lawsuit from the injured person. Florida law provides many ways for judgment debtors to protect their assets from creditors.

In other words, when auto accident damages exceed the driver’s insurance limits by substantial amounts, the plaintiff may elect to turn down a quick insurance settlement and sue the driver. The plaintiff must prove in court the defendant’s liability and that they suffered damages commensurate with their claim. Anything is possible in a court of law and jury trial; the jury award may be less, or more, than what the insurance company offers.

When the injured plaintiff chooses to file a suit instead of accepting an insurance settlement, the lawsuit could result in a judgment against the driver and owner for an amount above the insurance policy. In the event of an excess judgment, the insurance provider still pays up to the amount of the policy, and the plaintiff will try to recover the balance of the judgment from the defendant’s personal assets.  

The most likely scenario in which an injured person files a lawsuit against the at-fault driver is when (1) the insurance policy limit is low compared to the damages incurred and (2) the liable parties (at-fault driver or owner of the vehicle) have a substantial amount of assets at risk of collection.