If an insurer is demanding 2-3x the amount from the other, is it common for them to settle within policy limits or do they almost always go after the person personally?
If a car insurer is demanding more than the policy limit from another insurer, is it likely they go after the person personally?
byu/aHingaDingaDurgan inInsurance
Posted by aHingaDingaDurgan
4 Comments
Depends on what assets you have. If you have none, they’ll likely settle. If you have assets, they will come after them. This is why you need to be certain you are carrying the proper liability limits.
It’s going to depend on the circumstances. Suing someone and collecting the difference from the person is going to cost time and money. For an insurance company to actually do that, they would have to be pretty sure they could win a lawsuit and collect enough from the individual to justify the expense.
If they think you have the money/assets to collect the larger amount, they will do that. I.e., if you have a $25k policy limit, they have $100k in damages, and it’s clear that you have the assets to pay the $100k…..what incentive is there to take the $25k? Even if it costs them $25k in fees and expenses to collect the $100k, it’s still a no-brainer.
If the person had assets or a good income stream they will. If they don’t have assets, maybe not or not very hard. They may at least send a demand letter to try to scare a broke defendant into coughing up something even if they don’t follow up.
It’s a pure cost/benefit analysis. It costs money, primarily in lawyer time, to pursue a case. If there are assets or a good garnishment to be had, it can be worth it, if there are no assets, there’s no benefit so it’s not worth investing in pursuing the case.
They have every right to, though, and it’s their decision.