What will happen to me because I was at fault in a car accident an my insurance policy was not enough to cover the damage?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 3, 2015

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Insurance Question from Indianapolis, IN

Asked on 12/03/2015

What will happen to me because I was at fault in a car accident an my insurance policy was not enough to cover the damage? I live in Indiana and was found at fault for an auto accident. My coverage went up to $10,000, but their insurance company, State Farm, said the damage is $22,000 and that I'm responsible for the rest. They told me to call them to make payments. I'm unemployed and living in a halfway house. I do have a 2000 Ford Explorer, paid for, and about $1,500 in the bank to carry me as far as it will take me. What are my options? Will my license be suspended?

Answer given on December 03, 2015

If you caused an auto accident and you had legal insurance limits for your state, your insurance company will pay up to the limits of the policy. If that amount is not enough to pay for the damages caused, the other insurance company may try to come to you to pay the difference. Call the insurance company and see what they expect from you. Explain your situation, but don’t share the money you have in the bank. If they want that information then they can obtain it through other sources. Since you are not working, they may just get a judgement against you which will be on your credit record. If you become employed you could go back to them to try to work out a payment plan, but it is unlikely they would expect you to make payments if you aren’t working.

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