What happens when car accident claim exceeds inusrance limits?
When a car accident claim exceeds the limits of your insurance, it can lead to financial difficulties. Your insurance company will cover costs up to the policy’s limit, but you’re responsible for any remaining expenses. If the other party files a lawsuit, you might have to pay for legal representation and potential judgments. To mitigate this risk, consider umbrella insurance which provides extra coverage when your primary policy limits are exhausted.
Can umbrella insurance help in this situation?
Yes, umbrella insurance can help when a car accident claim surpasses your primary insurance limits. It offers additional liability coverage that becomes effective after your primary policy reaches its limits. This coverage can protect you from significant financial losses due to high compensation and legal costs. It’s important to review your umbrella insurance policy to understand its terms and conditions, as coverage varies. Consulting with an insurance agent is advisable to ensure you have comprehensive protection in case you exceed your primary insurance limits.
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