What happens when car accident claim exceeds insurance limits?
What happens when car accident claim exceeds insurance limits? When a car accident claim exceeds the insurance limits, it can result in a challenging situation for the policyholder. Here's what typically happens in such cases: 1. Policy Limit Exhaustion: The insurance company will pay up to the policy's limit for the claim. Once that limit is reached, the insurer will not provide any further coverage, and the policyholder becomes responsible for any additional costs. 2. Personal Liability: If the claim exceeds the insurance limits, the policyholder may be personally liable for the remaining amount. This means that the policyholder will have to pay the excess out of pocket, which can be a significant financial burden. 3. Negotiations and Settlements: In some cases, the parties involved may negotiate a settlement to resolve the excess claim amount. This could involve the policyholder paying a negotiated sum to the injured party to settle the claim and avoid legal action. 4. Lega...