A serious crash can leave you facing medical bills, lost wages, and long-term challenges. When those costs are higher than what the at-fault driver’s insurance policy will cover, many ask, What happens when a car accident claim exceeds insurance limits?
At Tawney, Acosta & Chaparro P.C., we help injury victims throughout Texas and New Mexico recover the compensation they deserve—even when policy limits fall short. If your accident-related losses exceed the available coverage, our Texas and New Mexico auto accident lawyers will help you explore every legal and insurance option.
Please send us an online message or call (575) 222-1000 today for a free consultation.
Understanding Insurance Limits in Car Accident Cases
Every auto insurance policy includes liability limits, the maximum amounts the insurer will pay for a claim.
In both Texas and New Mexico, the minimum required limits are:
- $25,000 per person for bodily injury,
- $50,000 per accident for total bodily injury, and
- $10,000 for property damage.
These minimums often do not cover the full cost of even a moderate injury. If your losses exceed the limits, you may need to pursue additional compensation from other sources.
What Happens When a Car Accident Claim Exceeds Insurance Limits?
Even when your damages go beyond the policy limits, the insurance company will not pay more than the maximum stated in the policy.
In these situations, injury victims are often left with:
- Outstanding hospital bills,
- Future medical treatment costs,
- Lost income from time off work, and
- Ongoing disability or reduced ability to earn.
If this sounds familiar, you may wonder, What happens if medical bills exceed policy limits? The answer depends on other available insurance coverage and whether other parties share responsibility.
Who Pays the Damages That Exceed the Policy Limits?
When the at-fault driver’s insurance does not fully cover your losses, you may be able to recover from other sources.
These can include:
- The at-fault driver’s personal assets,
- Your own underinsured motorist coverage (UM/UIM),
- A third party who contributed to the crash, or
- An umbrella or excess liability policy.
Identifying these options takes a detailed investigation and often the help of a skilled personal injury attorney.
Legal Options When Insurance Coverage Is Not Enough
If your damages exceed what the insurance will pay, an experienced lawyer can help you pursue all available compensation. The following are the most common strategies.
1. Suing the At-Fault Driver Directly
You can sue the at-fault driver for the amount not covered by insurance. However, this only helps if the driver has significant assets, such as real estate, investments, or savings, that you can collect after a judgment.
Both Texas and New Mexico allow these types of lawsuits, but whether they’re worthwhile depends on the driver’s ability to pay and financial circumstances.
2. Using Your Own UM/UIM Coverage
If you have uninsured/underinsured motorist (UM/UIM) coverage, you may be able to recover additional compensation from your own insurance policy.
Insurers in Texas and New Mexico are required to offer this coverage, but you must either accept or reject it in writing. If you did not sign a valid waiver, coverage may still apply.
UM/UIM coverage typically helps with:
- Medical treatment costs,
- Lost income during recovery,
- Pain and suffering damages.
This route is often the most accessible when the at-fault party is underinsured.
3. Holding a Third Party Responsible
In some cases, another person, company, or government entity may have played a role in causing the crash.
These third parties may include:
- An employer, if the at-fault driver was on the job;
- A bar or restaurant, if they overserved an intoxicated person (dram shop liability);
- A vehicle manufacturer, if a defective part contributed to the accident; and
- A government agency, if poor road design or unsafe conditions were a factor.
Filing these claims requires thorough investigation and following specific notice requirements, especially when suing a public entity. Our team handles these issues regularly in both New Mexico and Texas.
4. Filing a Bad Faith Claim Against the Insurance Company
Under Texas law, insurers may be held responsible for judgments that exceed policy limits if they act in bad faith. If an insurer refuses to settle a claim that could have been resolved within limits, they may be liable for the full amount of the judgment under the Stowers Doctrine.
While New Mexico does not have an exact equivalent, general bad faith insurance principles may still apply. If your insurer delays, denies, or lowballs a valid claim, you may be able to bring a separate claim for damages.
How Often Do Auto Accident Settlements Exceed the Policy Limits?
Many clients ask: How often do auto accident settlements exceed the policy limits? The answer depends on the severity of the injuries and the amount of coverage involved. While most minor crashes settle within limits, cases involving catastrophic injuries, multiple injured parties, or permanent disabilities often exceed even high-limit policies. In these cases, exploring additional compensation avenues is essential.
What to Do If You Suspect Coverage Is Not Enough
So, can you get more compensation than the policy limits?
If you think your injuries may exceed the at-fault driver’s policy, take the following steps right away:
- Get medical care and keep detailed records,
- Document the accident scene and property damage,
- Avoid early settlement offers from insurance companies, and
- Speak to a personal injury attorney before signing anything.
A skilled lawyer can determine whether you can get more than policy limits and identify the best strategy based on your unique case.
Why Work with Tawney, Acosta & Chaparro P.C.?
At Tawney, Acosta & Chaparro P.C., we have helped countless Texas and New Mexico clients pursue full compensation, even when the at-fault party’s insurance was insufficient.
Our team understands:
- When to pursue UM/UIM coverage,
- How and when to file a Stowers demand,
- What evidence is needed to prove third-party liability,
- How to negotiate with multiple insurers and providers, and
- When to go to court to secure the full value of your claim.
We are dedicated to helping you recover everything you are legally entitled to—not just what the insurance company is willing to pay.
Contact Us Today
If your car accident exceeds policy limits, do not settle for less than you deserve. The legal team at Tawney, Acosta & Chaparro P.C. can help you uncover every available option, negotiate with insurers, and take your case to court if necessary. Contact us online or call (575) 222-1000 now for a free consultation. We serve injured clients throughout Texas and New Mexico and are ready to fight for your financial future.
Resource List:
- See New Mexico Uninsured/Underinsured Motorist Statute
- See G.A. Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544 (Tex. Comm’n App. 1929).
Daisy Chaparro
Daisy Chaparro was born and raised in El Paso, Texas. A graduate from El Dorado High School in 2008 and obtained a Bachelor of Arts in Political Science with a minor in Philosophy from St. Mary’s University in 2012. Daisy then obtained her Juris Doctorate (magna cum laude) from Texas Tech University School of Law in 2015.
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