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Unsatisfied Judgement Funds and Their Bearing on Car Insurance Claims

One of the most stressful events in the lives of many Americans is a car accident. Whether an at-fault driver, innocent motorist in another vehicle, or simply a bystander who was injured, auto accidents leave a lasting impression. As there is no way to completely prevent accidents, car insurance agencies and policies exist to cover drivers, passengers, and bystanders in the event of an injury collision. In some cases, however, a policy is unable to fully compensate a bystander who is injured, or the driver of the vehicle may not have been carrying auto or car insurance at all. In these cases, what are known as unsatisfied judgment funds may be used.

These funds are typically administered by the state, and are paid out to those who can show that they were an innocent bystander who was awarded a judgment by the court, but cannot recover it through an insurance company because the maximum liability of the car insurance coverage has been reached, or the driver does not have the insurance to cover the damages at all. In these cases, the state may award unsatisfied judgment funds, which are paid to the claimant and then must be paid back to the state by the driver. If they cannot do so, their license is suspended.

For a driver, having a record of an unsatisfied judgment fund claim can hamper the ability to find affordable car insurance. While a car insurance quote online will still look reasonable and affordable, once car insurance agencies become aware that a previous unsatisfied judgment fund claim was made either with too little liability coverage in place or because the driver had no insurance at all, the possibility of obtaining a reasonable rate drops significantly. During the normal process of an insurance claim, it is possible that the maximum liability present on a car insurance policy will be exhausted, and that a bystander will seek unsatisfied judgment. So long as the funds can be eventually repaid, there will be limited repercussions for the driver. Their insurance company will likely raise their rates after the claim has been satisfied, but so long as there was not a gap or lack in coverage, the damage to the driver’s policy should be minimal.

No driver wants to find themselves in a position of having to repay the state for these funds. When obtaining any car insurance quote online, be sure to find out exactly what the liability maximums of that coverage are. Affordable car insurance is great to have, but not if it severely limits the amount of coverage offered, as this could lead to a substantial payout to the state, or a loss of both license and insurance coverage.

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