What would happen if the driver at fault for a multi-vehicle car accident did not have enough insurance to cover the auto damage of all parties involved?

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What would happen if the driver at fault for a multi-vehicle car accident did not have enough insurance to cover the auto damage of all parties involved?

Would the insurance company be legally required to divide the money up equally between all the victims involved in the accident?

Asked on December 9, 2014 under Accident Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

No, they would not automatically divide the amount. They could offer to do that; but if any of the injured parties refused to take a pro rata share, that party could sue; if they were the first to sue, they could potentially get a judment for all their injuries and loses, which could potentially use up all the insurance on one party. (The other injured parties would want to join in the suit to avoid this happening.)

Remember though: injured parties are limited to recovering only the amount of insurance. Rather, they could sue for all their loses and potentially recover amounts in excess of insurance coverage from the at-fault driver directly (assuming he or she had enough income and/or assets to pay the other losses).


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