How Often Do Auto Accident Settlements Exceed Policy Limits in Texas? (2024)

FAQs

How Often Do Auto Accident Settlements Exceed Policy Limits in Texas? ›

Auto accident settlements rarely exceed policy limits. An insurance company is not required to pay more than the limits of the policy.

Settlements can range from less than $1,000 to millions of dollars. That being said, you can get a rough idea of what to expect from average settlements. On average, car accident cases in Texas settle for around $22,000 – higher than the national average of $19,000.

What Happens If Accident Damage Exceeds Your Car Insurance in Texas. In Texas, if someone sues you for an amount exceeding your insurance coverage, you may face personal liability. This situation might lead to a deficiency judgment—a debt calculated as the claim amount minus your liability insurance policy limits.

A policy limits demand in a personal injury claim is a request made to an insurance company to pay the maximum amount an insurer has in their policy.

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.

Although there is no exact average whiplash settlement, settlements typically account for medical expenses, lost wages, and pain and suffering. An average whiplash settlement amount might be about $7,000, but can range up to $50,000 in some cases depending on all the circ*mstances.

As an example, if your economic damages total $10,000 and a judge or jury decides to use a multiplier of 2, the amount of pain and suffering damages you would receive is $20,000. With the $10,000 in economic damages, your total compensation would be $30,000.

Ultimately, if the court ruling surpasses your policy limits, your insurance company becomes responsible for the full judgment, even the excess amount.

In approximately 4% of auto accident cases, the settlement amount awarded to the victim exceeds the policy limit set by the insurance company.

A limit is the highest amount your insurer will pay for a claim that your insurance policy covers. Think of it this way: It's like filling up a fishbowl. If you file a covered claim, your insurance policy will pay up to a certain amount. You're responsible for any expenses that exceed the limit.

How much are most car accident settlements? ›

A: In California, the average car accident settlement amount is anywhere between $20,000 – $30,000, depending on the overall severity of the injuries sustained and any associated property damages, lost wages, etc. This is for more moderate cases in terms of their severity.

In Texas, there are technically no limits on the amount of economic damages you can recover after a car accident through a lawsuit in a court of law. While Texas does limit the amount of non-economic damages available in medical malpractice claims, non-economic damages for car accidents are not limited.

In some cases, a personal injury case may settle in a few months if it's relatively straightforward and both parties are eager to resolve it. However, if a lawsuit is filed and a case goes to trial, it may take several years to reach a conclusion.

If your car accident settlement is primarily intended to compensate you for physical injuries or medical expenses resulting from the accident, the good news is that these settlements are typically not taxable at the federal or state level in Texas.