What happens if medical bills exceed policy limits?

Asked by: Braeden Batz  |  Last update: April 10, 2025
Score: 4.8/5 (28 votes)

Insurance Policy Limits and Medical Bills After a Car Accident. If your medical bills exceed the defendant's auto policy limit, the defendant is still legally liable for the full amount of your damages. You can seek compensation directly from them or from an umbrella insurance policy if they have one.

What to do when medical bills exceed policy limits?

You can potentially recover more than the policy limits by suing third parties, using med-pay coverage, or filing a claim with an umbrella insurance policy. Suing the at-fault driver personally is an option, but collecting compensation depends on their assets.

Can you sue your insurance company for more than the policy limits?

A more common situation is where the insurance company failed to act in good faith and settle the claim within policy limits. In California, an insurance company that refuses to settle a claim in good faith may be liable for the full judgment at trial even if the amount exceeds policy limits.

What is the maximum amount an insurance company will pay?

Also known as your coverage amount, your insurance limit is the maximum amount your insurer may pay out for a claim, as stated in your policy. Most insurance policies, including home and auto insurance, have different types of coverages with separate coverage limits.

What if my medical bills are more than my settlement?

Options for covering medical expenses beyond a settlement include: Personal Injury Protection (PIP) Insurance: Provides coverage regardless of fault in an accident. Medical Payments Coverage (MedPay): Offers additional coverage for medical expenses from auto accidents.

When Medical Bills Exceed Policy Limits | Discussion with an Orlando Personal Injury Lawyer

45 related questions found

Will insurance pay for past medical bills?

While health insurance typically does not cover past medical bills incurred before the effective date of a policy, understanding exceptions and consulting with experts can provide clarity and options for managing healthcare expenses effectively.

How to negotiate past due medical bills?

How to negotiate and pay medical bills
  1. Review your bill for accuracy. ...
  2. Ask to lower the bill. ...
  3. Look for outside assistance. ...
  4. Request a medical bill payment plan. ...
  5. Work with a patient advocate. ...
  6. Consider a medical credit card. ...
  7. Settle with debt collectors. ...
  8. Think carefully before taking out a personal loan.

What is a policy limits settlement?

When you hear the term “policy limits,” it simply refers to the most your insurance company will pay for damages if you're at fault in an accident. In California, every driver must carry a minimum amount of insurance, but those minimums don't always cover the total cost of a serious accident.

What if my insurance pays me too much?

If the insurance company asks you to return the overpayment and you do not, it could file a lawsuit. If the insurance company wins, you may end up having to pay the money back, plus legal fees and possibly interest.

What is the difference between maximum covered loss and policy limit?

On the examination, policy limit will refer to the maximum insurer payment provided under a policy and maximum covered loss will refer to the loss (or total losses) above which no additional benefits are paid.

Can you argue for more money from insurance?

You should always be prepared to negotiate and ask for more.

Once you have compared the estimate to the insurance company's offer, you can begin to identify areas where you can ask for more money.

Can you sue an insurance company for not paying enough?

If you're not satisfied with the outcome of your dispute, you have the right to sue the insurance company in a court of law. You can use these resources to find legal help. You can also ask for alternative dispute resolution, which uses mediation with a neutral third party to settle disputes outside court.

What are damages in excess of policy limits?

Losses in excess of policy limits is an expression used in reinsurance agreements that refers to damages awarded by a court against an insurer in favor of the insured, due to the insurer's having failed to settle a third-party claim against the insured within the policy limits by reason of bad faith, fraud, or gross ...

How long does it take lawyers to negotiate medical bills?

Lawyers could take several weeks or several months to negotiate your medical bills. Factors influencing the decision include your insurance coverage, billing practices, the complexity of your case, and whether your medical provider chooses to cooperate or drag their heels.

Why are my medical bills so high even with insurance?

People who are uninsured are more likely to incur medical debt, but insured patients still receive unexpected medical bills that are too high, due to deductibles, copays, coinsurance, and surprise billing or balance bills.

What happens if medical expenses exceed income?

You are allowed to deduct all qualified medical expenses if they are more than the annual adjusted gross income (AGI) limit. The IRS does not have a gross cap on medical deductions because you must itemize all medical expenses and deductible expenses on Form 1040, Schedule A.

What happens if insurance gives too much money?

In some situations, they may allow you to keep the funds if you incur other damages related to your claim. However, they may also ask you to fill out a form returning the excess money to their agency. How each insurance company handles overpayment varies on a case-by-case basis.

What if the repairs are more than the estimate?

The definition of a totaled vehicle varies by state. California is what is called a total loss formula state. This means a vehicle is determined to be a total loss if the cost of repairs (your $7,000) plus the scrap value of the vehicle is greater or equal to the actual cash value of the vehicle.

What happens if your insurance policy has an excess of 500?

Essentially, the excess represents the amount you are responsible for before your insurance kicks in to cover the remaining costs. For example, if your van insurance policy has an excess of £500, it means that in the event of a claim, you will need to pay the first £500 of the costs yourself.

What happens if insurance doesn't want to settle?

If your insurance claim does not settle, your attorney can pursue a personal injury lawsuit on your behalf in civil court. Filing a lawsuit will involve: Preparing and filing legal documents. Gathering evidence.

What is the greater settlement rule?

Pursuant to the "Larger Settlement Rule," a D&O insurer must pay the entire settlement unless it can demonstrate that: (1) uninsured defendants were potentially liable for a claim for which the insured directors and officers lacked any responsibility; or (2) the settlement was higher by virtue of the uninsured ...

How do policy limits work?

What Are Policy Limits? In insurance, policy limits are the maximum dollar amount that an insurer will pay for covered damages or losses under an insurance policy. Policy limits may be expressed as a single limit or as split limits, with different maximums for each.

What are the consequences of unpaid medical bills?

Medical debt can also lead people to avoid medical care, develop physical and mental health problems, and face adverse financial consequences like lawsuits, wage and bank account garnishment, home liens, and bankruptcy.

How do I get out of old medical bills?

5 Useful Tips to Help You Erase Medical Debt
  1. 1) Negotiate a Lower Amount or Set Up a Payment Plan. You may be able to negotiate a reduction in the amount of your medical bills. ...
  2. 2) Hire a Medical Bill Advocate. ...
  3. 3) Apply for Charity Care. ...
  4. 4) Try Crowdfunding. ...
  5. 5) Declaring Bankruptcy: The Last Card to Play.

How much can lawyers reduce medical bills?

The extent to which lawyers can reduce medical bills varies depending on the circumstances. However, it's not uncommon for attorneys to secure reductions of 25% to 40% on medical bills when the insurance proceeds are limited, medical bills are high, and/or there a high hospital liens or other liens.