How can I protect my assets if I am sued for a car accident?
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How can I protect my assets if I am sued for a car accident?
I had a car accident and the passenger of the other car has filed a lawsuit against me for her injuries. My insurance is planning to resolve the case by paying off my policy limit without going through discovery process. However, the plaintiff is trying to get the remainder amount (which my insurance is not disclosing to me) through “underinsurance” component of her policy. What should I do to protect my assets as her insurance company can come after me? Is the decision made by insurance is correct?
Asked on July 16, 2011 under Personal Injury, New Jersey
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you settle all the claims against you by the passenger of the other car for his or her personal injuries through your own insurance policy in a written settlement agreement and a dismissal of the complaint against you with prejudice, you do not have to worry about protecting your personal assets. The lawsuit against you would be resolved against you for the full amount of your insurance policy where the person suing you hopefully would give you a full release for his or her injuries.
The "underinsurance" component of the passenger who sued you deals with a situation where the passenger has an insurance policy that would pay him or her for injuries sustained beyond the amount your insurance policy would be paying.
From what you stated in your question, it does not appear that the passenger of the other car is going to seek your personal assets beyond the amount of your insurance policy for injuries received.
In most States, you need to protect your personal assets through a trust or corporation before the events leading to a lawsuit arise. It is always good to have adequate insurance to protect you.
One way to protect your home is to file a homestead exemption upon it if the State you live in does not have laws granting the proeprty owner an automatic homestead exemption on their home up to a certain amount.
Perhaps you need to speak with your attorney or insurance representative about the lawsuit against you to make sure that the passenger of the other car will settle against you only for the full amount of your insurance policy.
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