What can happen if I don't have any assets and I don't have enough insurance coverage?

Asked 9 months ago - Nutley, NJ

I am being sued for an auto accident. The plaintiff is asking to settle for $1 million. My insurance only covers $10,000. I don't own anything except an old car and I don't have any savings and I live paycheck to paycheck. What can happen If the plaintiff wins the case and Is awarded more money than my insurance covers?

Attorney answers (7)

  1. Dean P Murray

    Contributor Level 18

    11

    Lawyers agree

    Answered . You have to speak with a lawyer. The Plaintiff can ask for $100 million. The question is, can he prove his case? (He meaning he or she). Just because he asks for it doesn't mean he"s entitled to it. And even if he gets a judgment, you may be "judgment proof". Consult a lawyer.

    IMPORTANT: Mr. Murray's response is NOT legal advice and does NOT create an attorney-client relationship. You... more
  2. Daniel Nelson Deasy

    Contributor Level 20

    11

    Lawyers agree

    Answered . This is a nightmare for you. What can happen? Well, this person can obtain a judgment against you and proceed to collect on the judgment by garnishing your bank accounts and wages. You may even be forced into a bankruptcy filing if it would help. You need to sit down with an attorney who defends against tort claims for an honest appraisal of what is to come.

    In no way am I offering you legal advice, and in no way has my comment created an attorney-client relationship.... more
  3. Christian K. Lassen II

    Pro

    Contributor Level 20

    9

    Lawyers agree

    Answered . Best thing to do is retain local independent counsel to protect your interests and assets. Why risk it by putting your life in the hands of a low-level insurance lawyer.

  4. Samuel Cohen

    Contributor Level 20

    10

    Lawyers agree

    Answered . Speak to your insurance company and find out what the situation is at present. Once you find out, speak to a lawyer and ask your questions to her/him.

    The information provided is for general informational purposes only and is not intended to be legal advice. I am... more
  5. Philip Anthony Fabiano

    Contributor Level 20

    9

    Lawyers agree

    Answered . In some states you c an make a demand for a specific sum in a complaint. In Pennsylvania you cannot. The amount of the demand should not concern you. What do you know about the nature and extent of the injuries? To your knowledge are they serious enough that $1m is realistic? In any event, the $10k policy limit is not very high and even in a "minor" case you appear to be at risk for an "excess" verdict. You would be responsible for any excess verdict beyond the amount of your $10k coverage.
    Lets look at this practically though. Your insurance company has an obligation to "protect" you from the potential for an "excess" verdict. That means that if the damages appear to be greater than your coverage at some point your company should be offering the $10k in exchange for a complete release--a release that say they will end the lawsuit and not try to go after your personal assets. That does not mean the other side has to agree to this but again lets look at this practically. If I represented the other side, I would do an asset check. Once I found you did not have assets to cover an excess verdict and I thought you were not likely to get significant assets anytime soon, I would likely recommend to my client that he/she accept the policy limit and be done with the case. This is especially true if my client has what is called underinsured motorist coverage, where my client can make a claim to his/her own policy if the other side does not have enough coverage pay a claim.
    You may want to retain your own lawyer--at least spend money for an hour of an attorneys time to go over your situation to consider status in the claim and your option. Google insurance defense auto lawyer and your city to find someone who normally handles cases for defendants in car wreck lawsuits.

    If you feel this is the "best" answer or is "helpful," please indicate. Since I am limited to the information you... more
  6. Matthew C Simon

    Pro

    Contributor Level 18

    2

    Lawyers agree

    Answered . I agree with my colleagues. Seek a free consultation with an experienced personal injury attorney asap to discuss your case in detail. Good luck.

    The above is general information only and is not legal advice. The information provided does not form an attorney-... more
  7. John Robert Gorman

    Contributor Level 10

    2

    Lawyers agree

    Answered . Don't worry that the plaintiff is suing for "$1 million." That initial demand has nothing to do with the value of the case. If the plaintiff has the "limitation on lawsuit" tort threshold, his/her case may be worth $0 if his/her claimed injuries are not serious enough. NJ does not sell $10,000 liability insurance policies--the minimum liability coverage for a standard policy is $15,000. If his/her case justifies it, your insurance company may pay the $15,000, and then the plaintiff may pursue an underinsured motorists (UIM) claim with his/her own auto carrier. If that carrier pays UIM benefits, it will have the right to chase you, but given your financial picture, in my experience it likely won't.
    Good luck.

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