What happens if you get sued for an amount more than your liability coverage?
Question Details: My son hit someone with a car that its under my names only, not my wife. Everything else my wife and I own just and 18 wheeler and a van, is under our companys name a corporation, not a LLC. My wife's name is not in the title of the car. We also have a couple of computers and some old furniture in a rented apartment. The young lady said she was fine to the policeman that showed up. But, a few days latter my insurance company informed me that her lawyer had called and said that she was seeing a chiropractor, she's not suing yet but it looks like she will. Talking a little more to my insurance company, I learned that my wife had made the terrible mistake of getting minimum liability coverage $10,000. If she sues for a sum larger than the $10,000 covered by the insurance and ends up with a judgment in her favor, can she go after anything co own by me and my wife?
This is an excellent question, and circumstances that make you ask it can be unnerving to say the least. Take a deep breath and relax. You are going to be fine.
First, your insurance company is very capable of taking care of this for you. They do it all the time, and it is likely they can settle this matter for much less than your $10,000 in liability coverage. It sounds like the young lady is not seriously injured.
Second, even if the young lady is seriously injured, most claimants and their attorneys will accept your insurance limits as a final payment. Quite frankly, this is what they are after. Most automobile liability lawyers accept small injury cases (which is what your case sounds like at this stage) because they can settle them for small amounts quickly and efficiently and can handle large numbers of them. When they manage a serious injury case, it does not serve anyone to litigate it when the insurance limits are only $10,000. They will spend more than that in out of pocket costs - out of their pocket -- and that serves no one. Your insurance company will also spend more than $10,000 defending the case if they have to do that. So, in the end, it makes sense to pay the $10,000 limits for a serious injury and be done with it.
Third, Florida law gives you some protections. The first protection is the "no fault" statute. To sue you, the injured person must have a permanent injury. Permanent injury is a ill defined, but at least the young lady will have to have lingering injuries or she will lose in any lawsuit. Florida law (like other states) also requires your insurance company to protect your interests. If your insurance company could have settled this claim for your policy limits or less, then they will be responsible for anything owed over the limits.
Fourth, the claimant cannot reach any assets held in you and your wife's name. She cannot reach any assets held in your company name. It sounds like there is nothing she can reach beyond your insurance limits. Now that I have said that, I suggest you do not go around changing the title to your assets without legal advice. Transfers could be considered a fraudulent transfer and that would likely cause more trouble than it would solve. Get legal advice before you do something like this.
Rest assured that your insurance company will follow the claimant's injuries and negotiate a settlement, if possible. If the claimant sues you, your insurance company will hire a lawyer to defend you. There is plenty of time after that to take action. This lawyer will be your lawyer, not the insurance company's lawyer, and you can ask any questions you have at that time.
I don't see anything in your circumstances to cause a panic. It is difficult to be in these circumstances and I fully understand your concern. I recommend that you stay in communication with your insurance company and follow their advice. Unless a lawyer hired by your insurance company advises that you should seek "personal counsel," you should not need your own lawyer.
I wish you a prompt end to this matter and peace of mind.
