I just found out I am being sued and I discovered I am underinsured. How do I defend myself? Should I go bankrupt?

Asked almost 2 years ago - Tampa, FL

I was in an accident where the other party ran a red light and hit the back fender of my car. The police wrote her a ticket but she talked them into changing the fault of the accident even though I had a third party witness. They mailed me a ticket after the fact. Now I am being sued and I found out I am drastically underinsured. I thought because I had full coverage I was well insured but I only had $10,000! I asked my insurance company recently if my they covered rental cars and how much I would be liable for and they gave me the impression I was totally covered. I don't have any real assets except my 401k. I don't have a home but I do have about $25 debt. I do have good credit and a good job. What is my risk? Is bankrupcy my only option as I don't have enough money to pay?

Additional information

I got a letter from my insurance company saying the claim has already exceeded the amount of coverage and asking if I had any personal finances to contribute. I thought I had lots of insurance but it turns out I only had $10,000 for property damage and $10,000 for medical

Attorney answers (6)

  1. Jeffrey B. Lampert

    Pro

    Contributor Level 19

    14

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    chosen by asker

    Answered . You need not go into panic mode now. First, your insurance company will hire an attorney to represent you. Second, the other driver would have to win their case, and from what you describe they will have an uphill fight given they ran the light and hit your vehicle in the rear. The traffic ticket means nothing, and any crash report prepared by the investigating officer can NOT be admitted into evidence. And, it is entirely possible your insurance company will be able to get the case settled for the policy limits.

    So, let the situation play itself out. You can always go into bankruptcy, but since you have good credit you shouldn't unless you ABSOLUTELY have to, and you are not there at that point yet.

    I hope you found this response to be of assistance. This response shall not be considered the rendering of... more
  2. Alan James Brinkmeier

    Contributor Level 20

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    Answered . Talk this over carefully with the lawyer you get assigned to defend you by your insurer. It sounds like you have good defenses to the suit. and for all practical purposes you may be what is known as judgment proof regarding a runaaway verdict anyway.

    Good luck.

  3. Bret A. Schnitzer

    Contributor Level 16

    15

    Lawyers agree

    Answered . Unless the case cant be settled for policy limits or less, why go bankrupt now? The defendant has not exceeded your insurance policies with a jury verdict have they? If the answer is no than it is still just a claim and your personal assets are not at risk unless they get a judgment that exceeds your policy limits. Good luck.

    You should consult an attorney in your State at once. Visit our webpage and tell us what you think.... more
  4. David J. McCormick

    Contributor Level 20

    13

    Lawyers agree

    Answered . You do habe to talk this over with the attorney hired to represent you. If you were wrongfully given the ticket then you need to fight it. Also, if she is suing you she still needs to prove the crash was your fault. That is where the third party witness comes in handy.

    Good luck.

    DISCLAIMER: David J. McCormick is licensed to practice law in the State of Wisconsin and this answer is being... more
  5. Edward C. Airhart

    Pro

    Contributor Level 5

    13

    Lawyers agree

    Answered . Hire an attorney who has experience with automobile accident claims. They can evaluate the claim against you and can demand that your insurance company settle the claim for your policy limits. If your insurance company offers its policy limits and the injured person wants money from you then you can offer some of your own money to settle the case or ask to got to trial. You can always file bankruptcy. Your 401k is protected.

  6. James Lawrence Magazine

    Contributor Level 16

    9

    Lawyers agree

    Answered . I agree with my colleagues, and highly suggest contacting an attorney.

    Good Luck

    Jim

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