After you suffer injuries in an accident, you will likely have to deal with the insurer for the person or business that caused your injury. Insurance claims can usually be resolved faster than a lawsuit can. An insurance settlement after a car accident, medical error, or slip and fall accident can put money in your pocket so that you can pay your medical bills and take time off from work to recover.

But sometimes, an insurance claim settlement will fail to cover all of your expenses. What can you do when you claim isn’t enough? Here are some things that you should know about insurance claim settlements and the options that you have after accepting an insurance claim that wasn’t enough.

How Does Liability Insurance Work?

Most injury claims are filed through the insurer for the person or business that caused your injury. 

For example:

  • Car accident injuries fall under the auto insurance policy for the driver who caused the accident in an at-fault state like Texas.
  • Slip and fall injuries are usually covered under a homeowner’s insurance policy or a general business liability policy, depending on whether your injury occurred at a residence or a business.
  • Medical errors fall under a malpractice insurance policy for the health care provider or facility where the error occurred.

Policy limits exist so that the insurance companies can properly price their policies based on exposure to risk. For example, a policy with a limit of $100,000 will be more expensive than a policy with a limit of $50,000.

Policy limits also tell you the maximum compensation that is available if the insured person causes an injury to another party.

For example, Texas requires all drivers to carry liability insurance. The minimum bodily injury coverage required by law is $30,000 per person and the total value is capped at $60,000 per accident. This means that the most compensation that any single person can recover under this type of policy is $30,000. It also means that if multiple people are injured in an accident, they must share $60,000 to cover all of their injuries.

How Can Insurance Claim Settlements Come Up Short?

Claim settlements might fail to cover all of your expenses for a few reasons, including:

You Accepted a Settlement That Was Too Low

After your claim is submitted to the insurance company, a claims adjuster will assess their insured’s liability and your losses. If the adjuster agrees that the insured party caused your injuries, they will make a settlement offer based on your losses.

Oftentimes, the original settlement offer will be very low. Some insurance companies do not even offer enough to cover your documented medical bills, let alone your lost income and future medical bills.

Adjusters often use your desperation against you. They might offer money right away but deliberately undervalue your claim. You may be tempted by their offer, since you might have unpaid medical bills and cannot work.

But if you accept a low offer, you may quickly exhaust your resources to be able to continue your medical treatment or pay your living expenses while you are out of work. When you accept a settlement offer, the insurer will require you to release them from all claims. This release will bar you from reopening the claim and asking for more money in the future. In fact, settling your claim will likely release all parties from liability.

To avoid this situation, you should consider hiring a lawyer to negotiate on your behalf. A lawyer can prevent the adjuster from using your desperation against you during negotiations.

Insurance Policy Limits Were Too Low

An insured party is responsible for choosing and paying for the policy limits that are associated with their liability insurance. This means that you could be stuck with inadequate compensation if the insured party selected policy limits that were too low to cover your losses.

For example, suppose that you were in a car accident with someone who only bought the minimum liability coverage in Texas. If you suffered a serious brain injury, your medical expenses and lost income might far exceed the $30,000 policy limits. Even if you could prove that your damages were higher than the policy limits, an adjuster would not be able to pay more than the policy allows.

To avoid this situation, you should be careful when you accept an insurance settlement. Adjusters almost always require you to release all of your claims before they’ll provide you with a settlement check. If you release your claims, you cannot seek further compensation from the person or business that caused your injuries and the only compensation you will ever receive for the accident will be the settlement check.

Instead, you might want to sue the person or business that is at fault for your injuries. The insurance company will defend their insured, but will take responsibility for any damages incurred up to the policy limits. Any amount awarded over the policy limit will be due from the person who caused your injuries.

You Incurred More Expenses Than You Anticipated

It can be difficult to estimate how much you will need to cover your medical expenses and lost income. For example, you might only have $3,000 in medical bills and lost income when you file your claim. But going forward, your injuries might require years of physical therapy and keep you from working full-time or force you to look for a new job.

Under Texas law, you are entitled to future expenses and lost income that are likely to result from your injuries. If you underestimate these future losses, you may severely undervalue your claim.

To avoid this situation, you should hire an injury lawyer to evaluate your claim. You must know the value of your claim to know when the adjuster has made a fair offer that includes your present and future economic losses.

What Can You Do If You’ve Already Settled?

If you have already settled your claim and ran out of money to cover your losses, you have very few options available. Let’s take a look at these options below.

Challenge the Release

You may challenge the release given to the insurance company. But you will have an uphill battle to be successful at this because you’ll be required to prove a defect in the release or release process.

That might mean:

Absent these serious flaws, a court will probably enforce the release.

File a Lawsuit Against Someone Else

If your injuries had multiple causes, you could pursue and settle multiple claims. For example, suppose a negligent driver caused your accident, but a negligent paramedic made your injuries worse than they should have been. You could pursue separate claims against the driver and the paramedic.

Be Proactive

In most cases, an accepted claim settlement will limit the money you can ever get for your injuries. That’s why it’s so important to be proactive and make sure your claim settlement is fair before you accept it.