When your damages are greater than the at-fault driver’s liability limits, the short version is this: insurance limits may cap what the liability carrier will pay, but they do not automatically cap the value of your damages claim. The at-fault driver can still be legally responsible for the full amount of proven damages, and you may have additional avenues of recovery beyond the at-fault driver’s policy.
Nevada law shapes how you evaluate, negotiate, and pursue these over-limits cases.
The key point: policy limits affect collectability, not fault or damages
Nevada requires drivers to carry minimum liability insurance, but the minimum limits are often inadequate for even moderate injuries. (NRS 485.185). If your medical bills, wage loss, and pain and suffering exceed those limits, you may face a gap between the case value and available liability coverage.
Step 1: Confirm the deadlines, because over-limits cases often require litigation
Personal injury claims generally have a 2-year deadline
If you must file suit to pursue full damages, Nevada generally provides two years to sue for personal injuries caused by wrongful act or neglect. (NRS 11.190(4)(e)).
Property damage claims generally have a 3-year deadline
Vehicle property damage claims commonly fall under the three-year limitation for injury to personal property. (NRS 11.190(3)(c)).
Practical point: Many over-limits cases settle, but you cannot safely assume settlement will occur before limitations expires. If the case is not resolved, preserving the claim through timely filing can be essential.
Step 2: Understand what the at-fault driver’s insurer can and cannot do
The liability insurer’s obligation is generally to its insured, up to policy limits
In a typical third-party claim, the at-fault driver’s insurer defends and indemnifies the insured, usually up to the policy limits, subject to policy terms.
If the insurer’s handling exposes its insured to an excess judgment, Nevada recognizes bad faith principles arising from the implied covenant of good faith and fair dealing in the insurance relationship. (United States Fidelity & Guar. Co. v. Peterson, 91 Nev. 617, 540 P.2d 1070 (1975); American Excess Ins. Co. v. MGM Grand Hotels, Inc., 102 Nev. 601, 729 P.2d 1352 (1986)).
Nevada has articulated standards for insurer bad faith in this context. (Guaranty Nat’l Ins. Co. v. Potter, 112 Nev. 199, 912 P.2d 267 (1996)).
Nevada Supreme Court guidance on over-limits settlement handling
Allstate Ins. Co. v. Miller is a leading Nevada decision addressing, among other issues, an insurer’s duties related to settlement opportunities and exposure beyond policy limits. (Allstate Ins. Co. v. Miller, 125 Nev. 300, 212 P.3d 318 (2009)).
Important limitation for injured claimants: Nevada has long held that a third-party claimant generally does not have the same statutory bad faith cause of action against the tortfeasor’s insurer that an insured might have, absent specific circumstances. (Gunny v. Allstate Ins. Co., 108 Nev. 344, 830 P.2d 1335 (1992)).
So, if your damages exceed limits, your primary lawsuit is typically against the at-fault driver (and any other responsible parties), not directly against the driver’s insurer for “more than the limits.”
Step 3: What your options usually are when damages exceed limits
Option A: Settle for the policy limits
If the at-fault driver’s insurer tenders the limits, you can choose to accept them. This provides certainty and avoids the risk, delay, and expense of litigation.
But accepting policy limits usually requires signing a release. A release can waive claims you might otherwise pursue against the insured driver. If you have additional recovery avenues, such as underinsured motorist coverage, settlement strategy matters.
Option B: Sue the at-fault driver for the full amount of damages
If the case value exceeds limits and settlement does not fully resolve the claim, you can sue the at-fault driver and seek a judgment for the full measure of damages. The insurer may still defend and may still only pay up to limits, but the judgment can exceed limits.
Collecting the excess portion may depend on the driver’s personal assets, income, and exemptions, which is why this is often a strategic decision rather than a purely legal one.
Option C: Identify additional liable parties and sources of insurance
Over-limits cases often turn on whether there are other defendants or other policies that can contribute, for example:
- Employer liability if the at-fault driver was in the course and scope of employment.
- Commercial policies, umbrella policies, or additional insureds.
- Roadway design or maintenance claims in appropriate cases.
- Product liability in rare vehicle defect scenarios.
Nevada’s comparative negligence and apportionment framework can significantly affect outcomes in multi-party cases. (NRS 41.141; Café Moda, LLC v. Palma, 128 Nev. 78, 272 P.3d 137 (2012); Humphries v. Eighth Judicial Dist. Court, 129 Nev. 788, 312 P.3d 484 (2013)).
Option D: Use your own UM/UIM coverage to fill the gap
If the at-fault driver is uninsured or underinsured, your own UM/UIM coverage may be the most realistic path to full compensation. Nevada requires UM/UIM to be offered and regulates it by statute. (NRS 687B.145).
Nevada Supreme Court authority has described underinsured motorist coverage as protection that can pay the difference between the insured’s damages and the tortfeasor’s available liability coverage, up to the insured’s UIM limits. (Mid-Century Ins. Co. v. Daniel, 101 Nev. 433, 705 P.2d 156 (1985)).
Anti-stacking issues can affect how much UM/UIM is available
If multiple vehicles or policies are involved, stacking questions can arise. Nevada allows insurers to restrict stacking if statutory requirements are met and policy language is clear. (NRS 687B.145; Nationwide Mut. Ins. Co. v. Coatney, 118 Nev. 180, 42 P.3d 265 (2002)).
If your UIM carrier acts unreasonably, Nevada law may provide remedies to insureds
Nevada recognizes a private right of action for insureds in certain first-party unfair claims practice contexts. (NRS 686A.310; Zhang v. Eighth Judicial Dist. Court, 120 Nev. 1037, 103 P.3d 20 (2004)).
That is a different posture than suing the at-fault driver’s liability insurer as a third-party claimant. (Gunny v. Allstate Ins. Co., 108 Nev. 344, 830 P.2d 1335 (1992)).
Step 4: Why over-limits cases often require careful strategy early
1) Do not let a low policy limit force an early undervalued settlement
Low limits can create pressure to “just take the money.” Sometimes that is the best outcome, but sometimes it is not, especially if UIM coverage or other defendants are available.
2) Preserve evidence and causation early
In higher-value cases, insurers more frequently contest causation, treatment reasonableness, and damages. Medical causation disputes may require appropriate expert proof under Nevada law. (Morsicato v. Sav-On Drug Stores, Inc., 121 Nev. 153, 111 P.3d 1112 (2005)).
3) Litigation cost risks and offers of judgment can affect net recovery
If the matter proceeds into litigation, Nevada’s offer-of-judgment framework can shift costs and attorney’s fees in ways that materially impact the net result. (NRS 17.117; NRCP 68; Beattie v. Thomas, 99 Nev. 579, 668 P.2d 268 (1983); Albios v. Horizon Communities, Inc., 122 Nev. 409, 132 P.3d 1022 (2006)).
Frequently asked follow-ups
Can I sue the other driver’s insurance company directly for more than the policy limits?
In most ordinary third-party cases, your claim is against the at-fault driver, and Nevada does not generally give third-party claimants the same statutory bad faith cause of action that insureds may have. (Gunny v. Allstate Ins. Co., 108 Nev. 344, 830 P.2d 1335 (1992)).
If my damages exceed limits, does that mean I automatically get the limits?
Not automatically. You still must prove liability and damages. Limits are the maximum the liability carrier typically pays on behalf of its insured, but the carrier can dispute fault, causation, and damages.
If I have underinsured motorist coverage, how does it help?
Underinsured motorist coverage may pay additional compensation when the tortfeasor’s available liability coverage is insufficient compared to the insured’s damages, up to the UIM limits. (NRS 687B.145; Mid-Century Ins. Co. v. Daniel, 101 Nev. 433, 705 P.2d 156 (1985)).
Nevada legal authorities cited
- NRS 11.190(3)(c).
- NRS 11.190(4)(e).
- NRS 41.141.
- NRS 485.185.
- NRS 687B.145.
- NRS 686A.310.
- NRS 17.117.
- NRCP 68.
- United States Fidelity & Guar. Co. v. Peterson, 91 Nev. 617, 540 P.2d 1070 (1975).
- American Excess Ins. Co. v. MGM Grand Hotels, Inc., 102 Nev. 601, 729 P.2d 1352 (1986).
- Guaranty Nat’l Ins. Co. v. Potter, 112 Nev. 199, 912 P.2d 267 (1996).
- Allstate Ins. Co. v. Miller, 125 Nev. 300, 212 P.3d 318 (2009).
- Gunny v. Allstate Ins. Co., 108 Nev. 344, 830 P.2d 1335 (1992).
- Zhang v. Eighth Judicial Dist. Court, 120 Nev. 1037, 103 P.3d 20 (2004).
- Mid-Century Ins. Co. v. Daniel, 101 Nev. 433, 705 P.2d 156 (1985).
- Nationwide Mut. Ins. Co. v. Coatney, 118 Nev. 180, 42 P.3d 265 (2002).
- Café Moda, LLC v. Palma, 128 Nev. 78, 272 P.3d 137 (2012).
- Humphries v. Eighth Judicial Dist. Court, 129 Nev. 788, 312 P.3d 484 (2013).
- Morsicato v. Sav-On Drug Stores, Inc., 121 Nev. 153, 111 P.3d 1112 (2005).
- Beattie v. Thomas, 99 Nev. 579, 668 P.2d 268 (1983).
- Albios v. Horizon Communities, Inc., 122 Nev. 409, 132 P.3d 1022 (2006).
If you need assistance with your personal injury case, don’t hesitate to contact Friedman Injury Law.
Friedman Injury Law
375 N. Stephanie St., Ste. 1411
Henderson, NV 89014
P: (702) 970-4222
W: blakefriedmanlaw.com