You are not eligible to register your car without liability insurance, in almost every state in the United States, including California. So, technically if you are driving a car without having liability coverage, that’s illegal. This is quite reasonable with nearly 15,000 car accidents occurring per day in the USA. So, when you are in an at-fault car accident, the liability coverage will protect you and settle the claims of the accident victims for their injuries. But things don’t go smoothly always. Instead, Multiple factors come into play including the limits of your liability coverage in terms of settling the injury claims.
Therefore, if you are the at-fault driver and the losses due to the car accident are above the maximum liability coverage limits, then it is your responsibility to pay the rest. Along with this, many drivers in the USA do not maintain their liability insurance policies properly.
Under any of the above circumstances, a court order in a personal injury lawsuit could put all your assets and finances at risk, including your house, your land, and your savings. So, can I lose my house due to an at-fault car accident? Yes, you can, depending on multiple factors. Hence, you should know your liabilities for an at-fault car accident and how to protect your assets after the car accident.
Consequences to Face Due to At-Fault Car Accident
If you are involved in an at-fault car accident, you have to face various consequences from facing a lawsuit to losing your house. This is all about determining and distributing the liabilities of the car accident. Let’s consider the things that you will have to face after a car accident.
Facing a Personal Injury Lawsuit
No matter whether you have liability insurance or not, the victim could file a lawsuit against you if you caused a car accident. However, if you have liability insurance, the insurer will hire the defense counsel for you to establish facts and information in your favor. Having said that, if you have caused serious injuries, there is a huge possibility that you would face huge financial liability. In that case, the amount of money you will get from your liability coverage will not be sufficient to safeguard your properties, including your house.
Limitations of Liability Insurance Coverage
There are certain limits in every liability coverage. This limit sets the maximum amount of money you can get from an insurance company in the case of an at-fault car accident. Different insurance policies have different limits for liability coverage. However, the state law suggests that every driver must have a liability policy that covers-
- $15,000 for physical injury per person per damage
- $30,000 for physical injury per accident
- $ 5,000 for the liability of property damage.
In reality, medical bills and vehicle damage can easily exceed the above-mentioned minimum limits in many cases. Therefore, the total financial losses that many drivers face are way above the liability coverage limits and that can result in the loss of their property.
The Property Loss Including the House
If the court finds you guilty, the judge could make a formal judgment stating the amount of money you owe the accuser. If the compensation amount is huge, you might lose your property, including your house to meet the obligation. If you don’t have sufficient assets to pay the compensation, you might have to face bankruptcy forcefully. Therefore, you should always consider having adequate liability insurance to avoid the loss of your property.
How to Protect Your Assets After a Car Accident?
One of the most effective ways to protect your home and other assets against a car accident liability is having an adequate insurance policy, such as an umbrella policy. However, if you have already caused a car accident, you can take the following steps to protect your assets-
- Talk to the insurance company to determine the possible damages and whether the damages are within the coverage limit.
- Discuss with a financial planner to recognize the protected assets in case the plaintiff wins the lawsuit.
- Work with your financial adviser to implement a plan to safeguard all your vulnerable assets.
- Submit a financial affidavit demonstrating your income, savings, assets, and debt. In this way, you can request the plaintiff to negotiate a fair settlement.
Can I Lose My House Due to At-Fault Car Accident?
Yes, under certain circumstances, you can lose your home due to an at-fault car accident. However, there are some states in the USA, including Florida where the homestead exemption will protect the at-fault driver from losing their houses. Having said that, there are also limitations to this depending on the location of your house. The best way to safeguard yourself from financial losses in the case of an at-fault car accident is to buy an adequate liability insurance policy.
