Can You Sue for More Than the Insurance Policy Limits in California?
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This page was written and reviewed by Michael J. Cefali, Esq. Attorney Cefali is a founding partner of Cefali & Cefali, APC, based in San Juan Capistrano, CA. He holds a Juris Doctor from Chapman University Fowler School of Law and a B.A. in Global Studies & Maritime Affairs from the California Maritime Academy. Widely recognized for his advocacy in personal injury law, he has secured multi-hundred-thousand-dollar settlements in motorcycle accidents, hit-and-runs, and red-light collision cases. He maintains a perfect 10.0 “Superb” rating on Avvo.
Beyond his legal practice, Mr. Cefali actively supports his community through the Rotary Club of San Juan Capistrano, contributes to housing and meal programs for those in need, and enjoys fishing and spending time with his rescue dogs.
The date below reflects when this page was last reviewed for accuracy. Please see our Editorial Guidelines.
Can You Sue for More Than the Insurance Policy Limits in California?
Yes, in California you can sometimes recover more than the at-fault party's insurance policy limits, but how you get there depends on the facts. The policy limit caps what that insurer pays, not what you are owed, and there are several routes to recover beyond it: the at-fault person's own assets, your own underinsured motorist coverage, additional liable parties, and, in the right case, an insurance bad-faith claim that makes the insurer responsible for the entire judgment. This guide explains each one. It is general information; for advice about a specific claim, speak with a car accident attorney.
Does an insurance policy limit cap what you can recover?
No. The policy limit caps what the insurance company is required to pay under that policy. It does not cap the value of your claim or the amount of a judgment. If your damages exceed the at-fault driver's coverage, you are still legally owed the full amount; the question becomes how to collect the difference.
This matters often, because California's minimum liability limit is only $30,000 per person for bodily injury (as of 2025, under Senate Bill 1107). A serious injury can easily exceed that. To understand how the underlying coverage works, see our guide on third-party liability insurance.
How can you recover more than the policy limits?
There are four main paths, and a strong case often uses more than one:
1. The at-fault person's own assets
The person who caused the crash is personally responsible for the full judgment, not just their insurance limit. If a jury awards more than the policy covers, the excess can, in theory, be collected from the defendant's personal assets. In practice, this only helps if the defendant actually has assets or income to reach, which is why the other routes below usually matter more.
2. Your own underinsured motorist (UIM) coverage
This is the most common way to close the gap. If the at-fault driver's coverage is too low to cover your injuries, your own underinsured motorist coverage can pay the difference, up to your UIM limit. This is exactly why carrying strong uninsured and underinsured motorist coverage on your own policy is so valuable; California insurers must offer it, though it can be declined in writing.
3. Additional liable parties and policies
Often more than one party is responsible, and each may have its own insurance. Depending on the crash, there may be a claim against an employer (if the driver was working), the owner of the vehicle, a commercial policy, a bar under narrow circumstances, or another at-fault driver. Identifying every liable party and policy is one of the most valuable things an attorney does after a serious crash.
4. An insurance bad-faith claim
This is the route that can make the insurer itself pay above its limit, and it is explained in its own section below.
What is insurance bad faith, and how does it "open the policy"?
Every liability insurance policy in California carries an implied covenant of good faith and fair dealing. Under a long line of California Supreme Court cases (beginning with Comunale v. Traders & General Insurance Co. in 1958 and Crisci v. Security Insurance Co. in 1967), that covenant requires an insurer to accept a reasonable settlement demand within the policy limits when there is a substantial likelihood of a judgment against its insured that exceeds those limits.
Here is why that matters to an injured person. If the injured party makes a reasonable demand within the policy limits, the insurer unreasonably refuses it, and a jury later returns a verdict above the limit, the insurer can become liable for the entire judgment, including the amount over the policy limit. Lawyers call this "opening the policy." The insured's bad-faith claim against their own insurer is routinely assigned to the injury victim, so the victim can pursue the excess directly from the insurance company.
Two points worth knowing: an insurer can be on the hook for the excess even when its insured was only partly at fault, and the injured person does not have to prove the insurer acted with outright dishonesty or fraud, only that its refusal to settle was unreasonable. This is what gives a well-documented, reasonable policy-limits demand its power.
What is a policy-limits demand?
A policy-limits demand is a formal offer from the injured person to settle the entire claim for the at-fault driver's policy limit, usually with a deadline. It is a key strategic tool. When liability is clear and the damages plainly exceed the coverage, the insurer's rational move is to pay its limit and close the claim. If the insurer unreasonably rejects a reasonable demand, it exposes itself to the bad-faith liability described above. Because the demand must be carefully worded and properly documented to have this effect, it is something an experienced attorney prepares.
Do you need a lawyer to recover more than the policy limits?
Realistically, yes. Recovering beyond a policy limit turns on identifying every available policy, stacking your own UIM coverage correctly, and, where appropriate, making a properly structured policy-limits demand that sets up a bad-faith claim if the insurer refuses. These are not things most people can do on their own, and the insurer will not volunteer them. An attorney who handles serious injury cases knows how to build the claim and pursue the full value of your losses, and most work on a contingency fee basis, so there is no fee unless they recover for you. To learn more, see our Orange County personal injury page or how a personal injury lawyer can help. Cefali & Cefali offers a free, no-pressure consultation at (949) 325-7790.
Michael Cefali is a dedicated accident attorney based in San Juan Capistrano, California, committed to securing justice and fair compensation for accident victims.
A graduate of Newport Harbor High School, he went on to earn his Bachelor’s degree in Global Studies and Maritime Affairs from the California Maritime Academy, followed by his Juris Doctor from Chapman University School of Law.
Deeply invested in his community, Michael is an active member of the Rotary Club of San Juan Capistrano, contributing to efforts that provide meals, housing, and support to those in need. Outside of his legal work and volunteer service, he enjoys fishing in Dana Point and spending time with his three rescue dogs—a Chihuahua, a Spaniel mix, and a Shepherd mix.
Driven by his strong belief in justice and fairness, Michael remains steadfast in advocating for individuals harmed by the negligence or inaction of others.
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