How to Collect Excess Damages in Your Personal Injury Case
Prevailing in court may not guarantee that a person injured in an accident will be able to collect all the damages he or she was awarded, thanks to insurance policy limits. Read this article to learn what you can do to ensure a compensation payout beyond these limits.
Almost invariably, extensive financial losses are among the many unfortunate consequences of suffering a mishap caused by another party such as a car crash or a property hazard-related incident.
The cost of damages to the injured person, including medical bills and the loss of income, can easily surpass tens of thousands of dollars. These costs should be covered by the insurance company representing the liable party. However, when the insurer is being uncooperative and unreasonable – perhaps by presenting unreasonably low settlement offers – filing a personal injury lawsuit may become the injured person’s best chance to obtain the full amount of compensation they’re entitled to.
Nevertheless, in some circumstances, winning a lawsuit and being awarded compensation may not necessarily guarantee that the injured party will be able to immediately collect all of the damages. As explained in one of our previous articles, this is due to the fact that insurance companies are legally obliged to pay out compensation only up to the limits of their customer’s policy. In practical terms, this means that if the at-fault person’s policy limit for liability insurance is $25,000 (the minimum required in New Mexico), it is the maximum amount that the insurance company will have to pay out regardless of the compensation awarded.
Collecting personal injury damages in excess of the policy limit is not an easy task but it’s not impossible either. In this article, we will analyze three basic strategies that may be used to collect compensation beyond policy limits: bringing a lawsuit against multiple parties, collecting damages from an umbrella policy, and collecting from the at-fault party personally.
Lawsuit Against Multiple Defendants
When injuries are caused by the actions or negligence of more than one party, a personal injury lawsuit may seek compensation from multiple defendants. In such situations, even though an individual defendant’s policy limits may be low, the combined coverage of all the defendants mentioned in a lawsuit may be high enough to fully cover the injured party’s losses.
While multiple at-fault parties may not be identified in every kind of accident or mishap, the following personal injury situations may involve multiple defendants in a lawsuit:
- Product liability accidents – a claim may be brought against the manufacturer of the final product, manufacturers of individual parts, the distributor of the product, and even the store the product was purchased in.
- Nursing home negligence and accidents – a lawsuit may identify both the nursing home itself and its employees as liable for neglect and injuries.
- Property liability accident – in some cases, the owner of the property where the accident happened may be sued along with the construction company and the contractors.
- Medical negligence – similarly to nursing home injuries, in the case of medical negligence an individual doctor or doctors may be sued along with the hospital or medical facility where the malpractice occurred.
Collecting Damages From an Umbrella Policy
An umbrella policy is a type of insurance that provides additional coverage over and above other insurance policies that a person or company may have in place. Umbrella policies are basically supplementary liability policies designed to prevent the possibility of payout from the defendant’s personal assets in the case of especially large claims or compensation awards. However, it is much more common for businesses and organizations to have umbrella policies than it is for private persons and therefore this option may not apply in personal injury claims based on an individual’s negligence.
Collecting From the At-Fault Party Personally
If you are unable to collect the full amount of compensation you’re entitled to from the at-fault party’s umbrella policy and if there are no other defendants, the last resort your attorney may suggest is to collect the excess damages personally from the at-fault party. In most cases, this is a complicated process that will require a lot of effort on your part. Usually, you will have to obtain a court order to force the defendant to pay the compensation from their personal property or other assets. The court may, for example, order wage garnishment – which involves deducting money from the defendant’s salary towards your compensation payouts. You may also try to force the defendant to liquidize some of their assets or place a lien on their property.
It is important to stress that collecting excess damages in a personal injury case usually isn’t a DIY solution. In the grand majority of cases, expertise and guidance from a lawyer experienced in collecting compensation beyond policy limits will be necessary to successfully retrieve excess damages.