I just received a letter from my car insurance stating that the damage I caused in a rear end accident from last year exceeds my policy coverage by 12k (my policy was 5000 and the damage was 17k). I am 21 and can only work part time while in school meaning 12k is more than half of what I make yearly. Does anyone have any advice/experience about what happens next? I know I was stupid to have such low coverage and get into the accident but I really can’t afford to pay this. Is it possible the other party will just settle with what they can get from my insurance?
Accident damages more than policy coverage
byu/runneruppppp inInsurance
Posted by runneruppppp
2 Comments
What happens next is between you and the other car’s owner, insurance is done
* Paying for the repairs on a credit card
* Personal loan and pay them
* Work out a payment plan
If you don’t work it out you are still liable and will likely either be going to small claims court or superior court depending on the limits in your state.
I get that things are expensive but what world did you think that 5k in property damage coverage would be meaningful? That’s basically uninsured if you look at the price of cars today. This is a cheap…ish lesson. Imagine if you totaled a guy’s Porsche Teycan. You’d be filing for bankruptcy to discharge that debt.
They may settle or they may ask you to do a payment plan. Depending on the carrier, they may do as little as 50/month for a reduced amount.
If you agree, you absolutely MUST NOT default because then they will seek the full owed amount plus add interest.