What can happen if I crashed my car into a water pipe and 4 apartments in basement of my building were flooded?

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What can happen if I crashed my car into a water pipe and 4 apartments in basement of my building were flooded?

The landlord’s insurance company is getting the apartments fixed. Myself and all the tenants have renters insurance with $100,000 liability coverage. I do have auto insurance with $15000 property damage coverage. It seems my landlords insurance company and the renters insurance companies of neighbors would go back of my auto insurance to cover their costs since it is my fault. If the total estimate is more than $15,000 (around $50,000) and my auto insurance clears just $15,000, will the landlord’s and renter’s insurance companies of neighbors sue me for the remaining balance?

Asked on May 27, 2014 under Accident Law, Pennsylvania

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Since your auto insurance is inadequate to cover the damage claims of the landlord and the tenants, they could file a lawsuit against you for negligence. Refer the lawsuit to your auto insurance company which will provide you wiht an attorney at no cost to you.  If the plaintiffs (landlord and tenants) obtain a judgment against you which you cannot afford to pay, it would be advisable to file bankruptcy at that time.  It would be premature to file bankruptcy until there is a judgment against you because you wouldn't know the exact amount of the judgment prior to that time. 

Depending on your income and other factors, you may be eligible to file Chapter 7, which is a type of bankruptcy which eliminates certain types of debts.  If you are ineligible to file Chapter 7, you can file Chapter 13; however, Chapter 13 bankruptcy requires a plan (budget) for repayment of creditors.


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