When it comes to accident settlements, many people assume the at-fault party’s insurance limits will be enough to cover all damages. Unfortunately, that’s often not the case. In serious injury crashes—especially those resulting in wrongful death, brain injury, spinal cord injury, or permanent injury—the damages can easily exceed insurance policy limits.
Understanding when and how accident settlements exceed policy limits, and what your rights are, is essential. Victims need to know their options, especially when insurance companies fail to pay fair and reasonable compensation.
What Are Typical Policy Limits?
Oftentimes, drivers carry the minimum required coverage, which typically is not adequate to compensate someone’s damages resulting from a car accident.
Missouri, Kansas, and Arkansas all require drivers to be insured, at minimum, for $25,000 per person / $50,000 per accident for bodily injury.
These nominal amounts disappear quickly in even minimal injury cases, especially if the injured party required emergency care.
“We regularly see claims where a reasonable settlement demand amount is well beyond the policy limit” says Reed Martens, personal injury attorney at Monsees & Mayer.
When Do Accident Settlements Exceed Policy Limits?
Accident settlements often exceed coverage when:
- There are multiple victims injured by one insured party
- A victim requires extensive ongoing care or surgery
- A case involves wrongful death or permanent injury
- The driver only carried minimum liability limits
For example, a distracted driving crash resulting in traumatic brain injury may lead to a jury verdict in the six or seven-figure range, but potentially be limited by insurance policy limits of $50,000.
What Happens If the Policy Isn’t Enough?
If the fair and reasonable value of the harm exceeds the insurance limits, an injured party may have additional, legal options:
1. Underinsured Motorist Coverage (UIM)
This coverage kicks in when the at-fault party’s policy is not sufficient to cover the full amount of the harm caused.
2. Bad Faith Claims Against the At-Fault Insurer
If an insurance company refuses a reasonable settlement offer within the policy limits, it may open itself up to a bad faith lawsuit. This can lead to liability beyond the policy limits.
3. Recovering from the At-Fault Driver Personally
In cases where damages far exceed the policy, an injured party can pursue the driver’s personal assets—though these are often limited.
“It’s rare, but in some cases, we’ve recovered amounts paid directly by the wrongdoer,” says David Mayer, co-founder at Monsees & Mayer. “But most tortfeasors don’t have assets worth pursuing, which is why insurance coverage is so important.”
Comparative Fault and Settlement Limits
Accident settlements also vary depending on fault-sharing rules:
- Missouri: Follows the pure comparative fault rule —victims can recover even if 99% at fault
- Kansas & Arkansas: Follows the modified comparative fault rule, barring recovery at or above 50% fault.
This means that even if damages are high, recovery may be reduced or eliminated depending on comparative fault of the injured party.
Examples of Excess Cases
Here’s what extra-contractual verdicts or settlements can look like in real-world Missouri and Kansas cases:
- Kansas rear-end crash with orthopedic injuries: $100,000 policy limit demand rejected by insurer; jury awarded $550,000. Full amount collected.
- Arkansas highway fatality: Insurer rejected $100,000 demand; jury awarded $800,000. Bad faith claim resulted in full collection.
Why Accident Settlements Are Rising
Settlement amounts have increased significantly in recent years due to:
- Rising medical costs
- Increased jury verdicts
- Expanded use of life care plans
- Aggressive litigation in commercial and trucking cases
How Attorneys Maximize Recovery
At Monsees & Mayer, our trial team looks at:
- Insurance coverage across all parties (including employers or vehicle owners)
- Stacking across multiple insurance policies
- Bad faith claims
- Asset research for personal payment by wrongdoers
“Accident settlements are more than numbers. They reflect human suffering and accountability. That’s why we build claims with trial-level precision, even if we settle,” says Ryan Frazier, shareholder at Monsees & Mayer.
Can You Settle Above the Policy Without a Lawsuit?
Yes. Insurers maypay more than the stated limits to avoid litigation, especially in catastrophic injury cases or when bad faith exposure is likely.
However, in most cases, collecting above the policy limit requires:
- A verdict or judgment
- A agreement with the insured to assign the bad faith claim to the injured party
- A finding that the insurer acted unreasonably in denying or refusing to settle the claim within the policy limits.
This process is highly fact-specific and varies by state law.
What Injured Persons Should Know
If you’re injured in a crash and your damages appear to exceed policy limits:
- Consult with an attorney, even if you don’t end up hiring the attorney.
- Do not accept any settlement offers less than the policy limits.
- Require the insurer provide written confirmation of the applicable policy limits, including production of the insurance declarations and an affidavit that no other insurance exists.
You can read more about legal options after a serious car crash on our Kansas City car accident page.
FAQs
How common is it for accident settlements to exceed policy limits?
More common than most people think—especially in severe injury, multi-victim, or commercial vehicle cases. It often depends on state laws, available insurance, and the insurer’s handling of the claim.
Can you sue for more than the policy limits?
Yes. Victims can seek additional compensation from insurers who act in bad faith.
What if the insurer won't settle for the policy amount?
You likely need to hire an experienced attorney to build your case for trial. If the jury returns an excess verdict, you may be able to file a bad faith claim against the insurer, especially if the insurance company unreasonably rejected offers within the policy limits.
