If someone sues you for more than your insurance covers, your insurer pays up to the policy limit, and you become personally responsible for the remaining amount, potentially risking your personal assets (home, savings, wages) through seizure or garnishment, though you can negotiate settlements, appeal, or file a "bad faith" claim against the insurer if they mishandled the claim.
If you're at fault it doesn't matter if you're sued or not or if the case is settled in or out of court – your rates will go up. Keep in mind that you will only be covered up until your third party liability limit on your car insurance.
How Much Can You Sue For? There is no fixed dollar amount for how much someone can sue for after a car accident. Compensation varies widely depending on the circumstances. Many people receive compensation in the tens of thousands, especially in cases involving minor injuries and minimal vehicle damage.
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.
When you've had multiple claims, your rate may increase, even if you weren't at fault in the accident (depending on your state and your insurer). While an insurer can't cancel your policy mid-term if you've made multiple claims, they may choose not to renew your policy.
Policy limits are the maximum amounts an insurance company will pay out for claims. These limits fall into two categories: Incident Limit: The maximum amount payable for a single covered incident. Aggregate Limit:The maximum amount payable for all covered claims during the policy period.
You pay the excess in the event of any claim made on your insurance policy regardless of who is to blame. However, if it's proved the collision was the other person's fault and the full cost is recovered from their insurer, you may be able to recover this amount.
Copayments and coinsurance: The amounts you pay your health care provider each time you get care, like $20 for a doctor visit or 30% of hospital charges. Out-of-pocket maximum: The most you'll spend for covered services in a year. After you reach this amount, the insurance company pays 100% for covered services.
Voluntary excess can be a little misleading, as it's not voluntary in the sense you can choose whether to pay it or not. You still have to pay the voluntary excess for a claim to proceed but you agree to the amount with your insurer when you take out your policy.
The 2008 financial collapse was responsible for the most expensive insurance payout of all time as the worldwide implosion of the financial sector saw countless businesses, financial institutes and economies suddenly fail, requiring a staggering payout of £15.4 trillion in total.
There's no precise formula, but it's generally recommended that personal injury plaintiffs ask for about 75% to 100% more than what they hope to receive. In other words, if you think your lawsuit might be worth $10,000, ask for $17,500 to $20,000.
The hardest injuries to prove are often soft tissue injuries (like whiplash), chronic pain conditions (like fibromyalgia), and psychological trauma (like PTSD), because they lack clear physical evidence on standard scans (X-rays, MRIs) and rely heavily on subjective symptoms and documentation, making them challenging to link directly to an accident for insurance or legal claims. Internal injuries or mild traumatic brain injuries (mTBI) can also be difficult as symptoms might not appear immediately or show on initial tests.
The average settlement amount for a personal injury car accident case in the United States is approximately $19,000. But the average car accident settlement tells you nothing about how much money you will get in your car accident settlement. Typical car accident settlement amounts do not predict compensation.
Insurance rates typically increase anywhere from 0% to 50% or more after an at-fault accident, though this varies significantly based on factors like the severity of the accident, the claim amount, and your driving history.
In some cases, if the amount is quite small, you may not want to make a claim because if you do so your future premiums could increase by more than the amount you have claimed. However, it's a good idea to make an insurance claim if someone has been injured.
How to Increase Your Personal Injury Settlement Value
If you are at fault, you must pay the insurance excess before your insurer covers the rest of the claim. The at-fault driver or their insurer is generally responsible if you're not at fault. In hit-and-run or uninsured driver cases, your insurer may still ask you to pay an excess initially.
If repairs cost less than your excess, the insurer will not cover the claim. You must pay the full repair costs yourself, though you should still report the incident to your insurer.
If you are not at fault, you will file a claim and pursue compensation from the other driver's car insurance, not yours. If the other driver did not have insurance, you can use your own UIM coverage—if you have it.
An out-of-pocket maximum refers to the cap, or limit, on the amount of money you have to pay for covered services per plan year before your insurance covers 100% of covered services costs.
Since a lower deductible equates to more coverage, you'll have to pay more in your monthly premiums to balance out this increased coverage. A survey commissioned by InsuraQuotes found that an increase in deductible from $500 to $1,000 had an average of 8-10% reduction in premium costs.
According to KFF, in 2025, employers covered 84% of their employees' single coverage plans and 74% of employees' family insurance plans on average2.
Whether you can be sued for a no-fault accident depends greatly on the circumstances of your crash. “No fault” generally refers to states requiring drivers to purchase personal injury protection (PIP) policies and turn to their insurance company for compensation after a crash.
Even if you choose to cover the cost out of your own pocket, you'll still need to notify your insurance company of the accident.