When an Auto Accident Settlement Exceeds Policy Limits in Massachusetts: Now What?

When you get hurt in a car accident, you might face damages that are worth hundreds of thousands or even millions of dollars.  In some cases, your injuries will be ably handled by insurance, and your damages will be covered in full.  But what happens when insurance is too low?

Usually, insurance companies are not going to settle your case willingly for higher damages than their policy pays.  They’ll treat that as a hard cutoff, giving you nothing beyond their policyholder’s policy limits.  However, the insurance company is not the only party involved.  If you sue an individual, their insurance company might cover some of the case and provide them with a lawyer, but the individual can be held personally responsible for some damages above and beyond their policy limits, paying them out of pocket.

For a free case review, call the Massachusetts personal injury lawyers at the Law Office of John J. Sheehan at (617) 925-6407.

Are There Legal Limits on How Much a Car Accident Case Can Pay in Massachusetts?

In the law, we use “damages” to refer to both the harms you suffered and the actual payments you receive for an injury or other harm.  In a car accident case, you will base your claim for damages on the sum-total of harms you suffered – medical bills, lost wages, pain and suffering, vehicle repairs, and other expenses that you faced because of the crash.  These damages can be quite high in some cases, and there is usually no legal cap on the amount you can claim.

When assessing your damages, our Canton, MA car accident lawyers will only be able to base damages on the amounts we can prove.  For example, if you paid $100,000 for medical care for your car crash, we cannot claim $1 million just for medical expenses; we are restricted to a $100,000 claim for that area of damages.  With some expenses, the “reasonable cost” is what is claimed, such as the appraised cost of repairing your car or, in a wrongful death claim, the reasonable cost of funeral expenses.

Since damages are based on what harms you actually suffered, they can be very high.  Some injury cases involve debilitating physical injuries that cause you millions of dollars in medical care, pain and suffering beyond comprehension, and additional expenses to cover services you can no longer perform for yourself (e.g., home care, grocery delivery, laundry, childcare).

In reality, most injury cases are not worth millions, but some are.  Because of this, Massachusetts has no upper cap on damages for car accident lawsuits.  However, there is one important restriction: Mass. Gen. Laws Ch. 231, § 6D does not allow you to claim pain and suffering damages unless your other damages are worth at least $2,000 or you have certain permanent or serious injuries.

How Do Policy Limits Work in Car Accident Claims in Massachusetts

Insurance companies never pay more than they have to, and every policy comes with a policy limit – or rather, a set of policy limits.  Insurance policies only reimburse the insured (the policyholder) for expenses the policy specifically covers and only up to the amounts the policy says.  Policies have limits on both the type of damages and the amounts.

The defendant’s insurance policy is only going to cover damages that are linked to the crash.  For example, if your car had a missing mirror before the accident or you had a wrist sprain from a fall two days after the crash, the defendant’s insurance policy has no obligation to cover these damages.

Policy limits for the actual amount the insurance policy will pay usually cover three areas of compensation.  First, they will have separate limits for damages that stem from your injuries and for property damage.  Second, there will usually be a “per accident” limit stating the maximum the insurance company will pay for that crash and a “per person” limit stating how much each injured victim can receive.  If the crash injures more people, the claim might reach the “per accident” limit before paying each driver their full “per person” amount.

Under Massachusetts law, drivers are required to have at least $20,000 per person and $40,000 per accident for injury coverage, plus $5,000 per accident for property damage.  Drivers can pay more for higher coverage amounts, raising the cap their policy will put on payments.

What Happens if Your Case is Over Policy Limits in Massachusetts?

If your injuries are worth more than the $20,000 the defendant’s minimum insurance will cover and they do not have a higher policy limit, there are a few ways to get damages paid anyway.  Since the insurance company will certainly not pay more than their policy says, these damages usually come from another source:


Massachusetts also has PIP (personal injury protection) coverage, which consists of first-party benefits to cover up to 75% of lost wages.  This is usually capped at $8,000 and helps cover your own injuries before you even get to claiming damages from the defendant’s insurance, reducing the burden on their $20,000 per person limit.

However, this is subject to that 75% limit and deductibles, meaning you leave money on the table this way.

Underinsured Motorist Coverage

You might have additional insurance on your own policy that can help cover you if the at-fault driver’s insurance is short.  This has its own policy limits, though.  Thus, if your injuries are especially expensive, even this might not be enough.

If the other driver had no insurance, you can use similar coverage called uninsured motorist coverage to pick up the slack.


When you sue a driver for injuries, their insurance will pay for their lawyer and cover their damages – up to policy limits.  If the court rules in your favor or the defendant settles the case, they can be required to pay the remainder of the damages out of pocket.  If the defendant is wealthy or has assets we can seize to pay for your damages, this can be a good way to get the rest of your damages covered.

However, the defendant might not be able to pay.  If they simply cannot afford to pay you for the damages they caused you and there are no assets to apply toward the costs, then you might be stuck with whatever damages insurance can cover.  This is why insurance is mandatory: it guarantees there will be at least some money to pay for your injuries.

Call Our Car Accident Lawyers in Massachusetts Today

For a free review of your injury case, call (617) 925-6407 to speak with the Law Office of John J. Sheehan’s Dracut, MA car accident lawyers.