What to Do About a Judgment Above Your Policy Limits
Finding out that a judgment exceeds your coverage is alarming, and the instinct is to deal with the judgment. The more important question is usually how the case got there.
Do not assume the excess is yours to carry
If your insurer had the chance to settle within your policy limits and unreasonably passed it up, the exposure it created may be its responsibility rather than yours.
Find out whether a settlement demand was made
Whether there was a demand within limits, when it was made, and how the insurer responded is the center of the analysis. Ask for that correspondence.
Ask what you were told at the time
Insurers generally must keep an insured informed about settlement opportunities and exposure above the limits. What you were and were not told matters.
Preserve everything from the defense
The defense file, the correspondence from assigned counsel, and any reservation-of-rights letters. This is the record of how the decision not to settle was made.
Act quickly on post-judgment deadlines
Appeal periods and enforcement timelines run on their own schedule, separate from any claim against your insurer. Both need attention at once.
Get advice before signing anything with the judgment creditor
How an excess judgment is resolved can affect the claim against the insurer, including whether it can be assigned. Do not negotiate that alone.
What you can actually sue for depends on your state
These steps apply wherever your policy was issued. Whether you can sue under a statute, what you can recover, and how long you have differ sharply between states — choose yours.
Is your insurer treating you unfairly?
A free, confidential review can tell you whether what happened crosses the line — no cost, no obligation.
General information, not legal advice. Insurance law differs by state and every policy is different.