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

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?

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Attorney answers 7


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. You are not to rely upon my note above in any way, but insted need to sit down with counsel and share all relevant facts before receiving fully-informed legal advice. If you want to be completely sure of your rights, you must sit down with an experienced criminal defense attorney to be fully aware of your rights.

Matthew C Simon

Matthew C Simon


Exactly! Even if you have to pay for the consult.


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 should NOT rely on this response. Mr. Murray's response was generated without conducting a full inquiry as would occur during an attorney-client consultation. It is likely that the response above may be made less accurate, or become entirely inaccurate, as you, i.e. the questioner, disclose additional facts that should only be discussed during a private attorney-client consultation. I strongly recommend that you consult an attorney who is licensed to practice law in your state (or, in the case of immigration law, an attorney in ANY state), whereupon all relevant facts will be discussed. All responses posted by Mr. Murray on are intended as general information for the education of the public, and not for any specific individual. For persons located in New Jersey: To the extent that Mr. Murray's profile can be considered an advertisement in New Jersey, which is denied, be advised that NO ASPECT OF THIS ADVERTISEMENT HAS BEEN APPROVED BY THE SUPREME COURT OF NEW JERSEY. Furthermore, the selection methodology for the SuperLawyers' "Rising Stars" awards is set forth at length at this website:


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 only licensed in the Commonwealth of Pennsylvania and I am not providing you with specific legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information provided may not apply to any specific factual and/or legal set of circumstances and/or the jurisdiction where you reside. No attorney-client relationship is formed nor should any such relationship be implied. The information provided is of a general nature is not intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. Your question, although you may believe is simple, it is not simple. You require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.


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 provide, I cannot guarantee the accuracy of the answer. You should seek the advise of an attorney who can explore all aspects of your question. This communication does not form an attorney client relationship.

Matthew C Simon

Matthew C Simon


You may in new jersey.


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.


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-client relationship, and should not be relied upon to take or refrain from taking any action. I am not your attorney until we sign a retainer agreement.


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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