What happens if the damage caused in a car accident is more than my policy covers?

I got in an accident (my fault) and totaled my car. The other car might be totaled, too. The problem is, I have a $10,000 property damage limit and the other car is probably worth $20,000 or more. Will I owe them if the damage is more than my insurance pays?

Answer
“That is an unfortunate possibility. Your insurance company will only pay up to the limit of your liability coverage. If the damage in the accident exceeds that limit, it is likely that you will be responsible for the remainder.
Your insurance company will let you know if it appears that the damages will exceed your limits. In claims like this, if the other person has collision coverage, your insurer will urge them to use their own coverage.
The other insurance company would then have the right to pursue you for damages that they paid, which your insurance did not cover. They call this “subrogation.”
The best you can hope for is that the other person and their insurance company will sign a property damage release. This will release your insurance company (and you) from the responsibility of paying for the rest of the damage.”
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Shannon Martin
Answered on Apr 26, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
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