What to Do When the Other Driver Doesn't Have Enough Insurance

What happens when the other driver's insurance won't cover your full damage

When another driver causes an accident and their insurance company won't pay for all your losses, you have several paths forward. The fastest is usually a claim against your own underinsured motorist coverage, if you have it — this coverage exists specifically for this situation and can pay the difference between what the other driver's insurance covers and what you actually owe. If you don't have underinsured motorist coverage, you can pursue the at-fault driver directly through small claims court, file a lawsuit, or negotiate a settlement. The route you take depends on how much money is at stake, whether you have the coverage, and how willing the other driver is to pay.

The key thing to understand is that the other driver's insurance company will never pay more than their policy limit, no matter how much your damages exceed it. That's why it's called underinsured — their coverage is insufficient. Your own underinsured motorist coverage bridges that gap, but only if you purchased it when you bought your policy.

Key Takeaways

• Underinsured motorist coverage on your own policy pays the gap between the other driver's insurance limit and your actual damages, and is usually the fastest way to recover money.
• If you don't have underinsured motorist coverage, you can sue the at-fault driver in small claims court for amounts under $7,500 in South Carolina, or file a regular lawsuit for larger amounts.
• The at-fault driver's insurance company will not pay more than their policy limit, even if your damages exceed it — that's why it's called underinsured.
• You must report the accident to your own insurance company and provide documentation of the other driver's insufficient coverage before filing a claim against your underinsured motorist coverage.
• If the other driver has no insurance at all, your uninsured motorist coverage (a separate coverage) handles that situation instead.

How underinsured motorist coverage works

Underinsured motorist coverage is an optional add-on to your own car insurance policy. When you use it, your insurance company pays you directly for losses that exceed what the at-fault driver's insurance will cover. You pay a deductible (usually $250 to $500), and your insurer covers the rest up to your policy limit.

The process starts with a claim against the other driver's insurance. Their company will pay up to their policy limit — in South Carolina, the minimum is $25,000 for bodily injury per person and $50,000 per accident. If your medical bills, lost wages, vehicle repair costs, and other damages add up to more than that, you then file a claim with your own insurance company for the difference. Your insurer will investigate and either pay you or deny the claim.

This coverage only applies to injuries and losses you personally suffered — not damage to your vehicle. Vehicle damage is handled separately through collision coverage on your own policy, which pays for repairs regardless of who caused the accident (you pay your deductible, and your insurer may pursue the other driver for reimbursement later). Underinsured motorist coverage covers medical expenses, lost income, pain and suffering, and other injury-related costs.

Filing a claim with your own insurance company

Start by calling your insurance agent or the claims number on your policy card. Tell them you were in an accident caused by another driver, and that you believe the other driver's insurance is insufficient to cover your losses. Your insurer will ask for the police report number, the other driver's name and insurance information, and details of your injuries and damages.

Gather documentation before you call: medical records and bills, receipts for any out-of-pocket expenses, proof of lost wages from your employer, repair estimates or invoices, and photos of vehicle damage. If you've already received a settlement offer from the other driver's insurance company, bring that letter too — it shows what their limit is. The more complete your documentation, the faster your claim will move.

Your insurance company will then contact the other driver's insurer to confirm their policy limit and what they've already paid or offered. Once that's confirmed, your insurer will decide whether to pay your claim. This process typically takes two to four weeks. If your insurer denies the claim, you can appeal or pursue the at-fault driver through the courts instead.

Suing the at-fault driver directly

If you don't have underinsured motorist coverage, or if your insurer denies your claim, you can take the other driver to court. In South Carolina, small claims court handles cases under $7,500 with no lawyer required. For larger amounts, you'll file a regular civil lawsuit, which usually requires an attorney.

To sue in small claims court, go to the magistrate's office in the county where the accident happened or where the defendant lives. You'll pay a filing fee (usually $100 to $200) and fill out a complaint form naming the other driver and the amount you're seeking. The court will schedule a hearing, typically within 30 to 60 days. You'll present your evidence — medical bills, repair invoices, photos, and your own testimony — and the judge will decide whether the other driver owes you money.

Small claims judgments are enforceable, but collecting is your responsibility. If the other driver doesn't pay voluntarily, you can pursue wage garnishment, bank account levies, or liens on their property — but these steps require additional court filings and often cost more money. Many people win judgments they never collect, so consider whether the effort is worth it before you file.

Negotiating a settlement without court

Before filing suit, consider whether the other driver will negotiate. Send them a demand letter (you can write this yourself or have an attorney write it) that outlines your damages, the other driver's liability, and the amount you're requesting. Include copies of your medical bills, repair estimates, and any other supporting documents. Give them 30 days to respond.

Many at-fault drivers will settle rather than face a lawsuit, especially if they know they're liable. A settlement means they agree to pay you a lump sum in exchange for you signing a release stating you won't sue them. Get any settlement agreement in writing before you accept payment, and keep a copy for your records.

If the other driver refuses to negotiate or can't afford to pay, you're back to choosing between small claims court and accepting the loss. Some people find it's not worth the time and stress to pursue a judgment they may never collect, especially if the amount is small. Only you can decide whether the effort justifies the potential recovery.

The difference between underinsured and uninsured motorist coverage

Uninsured motorist coverage applies when the other driver has no insurance at all. Underinsured motorist coverage applies when they have insurance but not enough to cover your losses. These are two separate coverages, and you need both to be fully protected.

If the other driver is uninsured, you skip the step of filing a claim with their insurance company and go straight to your own uninsured motorist coverage. The process is the same — you file a claim with your insurer, provide documentation, and they pay you up to your policy limit (minus your deductible). South Carolina requires uninsured motorist coverage on all auto policies unless you specifically decline it in writing.

Underinsured motorist coverage is optional. Many people don't purchase it because they assume the other driver's minimum liability coverage will be enough. But minimum coverage in South Carolina is only $25,000 per person — a serious injury can easily exceed that. If you have significant assets or a high income, underinsured motorist coverage is worth the extra premium to protect yourself.

What to do right after the accident

At the scene, get the other driver's name, phone number, address, driver's license number, vehicle identification number (VIN), and insurance company name and policy number. Take photos of both vehicles, the accident scene, and any visible injuries. If there are witnesses, get their contact information too. Call the police and request a report — you'll need the report number later when you file claims.

Seek medical attention even if you feel fine. Some injuries don't show symptoms immediately, and medical records are crucial evidence if you later file a claim. Keep all receipts and records related to the accident, including medical bills, repair invoices, rental car costs, and mileage logs if you had to travel for treatment. Store these documents in one place so you can find them quickly when you need them.

Report the accident to your own insurance company within a few days. Don't admit fault or discuss the accident in detail with the other driver or their insurance company — just provide factual information. Once you've reported it, let your insurer handle communication with the other driver's insurance company. This protects you legally and ensures everything is documented properly.

Frequently Asked Questions

Can I claim underinsured motorist coverage if I was partially at fault for the accident?

South Carolina uses comparative negligence, meaning you can recover damages even if you were partially at fault — but your recovery is reduced by your percentage of fault. If you were 20 percent at fault and your damages are $10,000, you can recover $8,000. Your insurance company will determine fault percentages based on the police report and investigation.

What if the other driver's insurance company says they're not liable?

If the other driver's insurer denies liability, you can still file a claim with your own underinsured motorist coverage. Your insurer will investigate independently and decide whether the other driver was at fault. If your insurer agrees you were not at fault, they may pursue the other driver's insurer through subrogation (a legal process to recover what they paid you).

How much does underinsured motorist coverage cost?

Premiums vary by insurer, your age, driving record, and the coverage limit you choose. Most people pay $10 to $30 per month for underinsured motorist coverage. Contact your insurance agent for a quote — it's usually cheaper than you'd expect and worth the protection.

What if the other driver's policy limit is $0?

That's not possible in South Carolina — all drivers must carry at least the state minimum ($25,000 per person for bodily injury). If the other driver has no insurance at all, that's an uninsured motorist situation, and your uninsured motorist coverage applies instead.

Can I sue the other driver's insurance company directly?

No. Insurance companies are not liable for their policyholder's actions — only the driver who caused the accident is. You can sue the driver, and their insurance company will defend them and pay any judgment up to the policy limit. You cannot bypass the driver and sue the insurance company directly.