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Looking for information on how and what happens when you’re at fault for a vehicle wreck and the damages exceeds your limit of your insurance. I don’t have any assets of value; only debt and live paycheck to paycheck. As it stands now the insurance company is still trying to settle it within the limit however I have terrible luck and want to be at least mentally prepared for the next steps.
Happened to me. Was sued for what was left and set up a monthly payment plan with the other persons insurance company. I was sued for 15k and made 200$ monthly payments.
I was in this situation. The other insurance will (most likely) send you a letter asking you about your assets. Just answer then return. Could be months later, they will serve you with papers (what they have to do before they go after the others own insurance). I panicked when this happened to me, but reached out to a couple of different attorneys which all told me not to get upset, the insurance company’s would handle it, which they did. Contact your insurance company and ask them if to speak to someone concerning this accident. Ask them about an attorney they can appoint for you to talk to this other insurance company for you. This should be no charge to you because that’s what you pay for when you have car insurance. Try not to stress.
they called me yesterday explaining the situation. My insurance company is still trying to settle it out but I just want ideas for the “what if”. I’m not terribly concerned because there isn’t anything I own that’s worth anything. (I have a car that has a loan on it but it’s also registered with a joint owner and that’s about it) I know it could end up having something sent to debt collections but my credit is in the dumps as is
The only thing I’m really worried about is if my wages would ever have the potential to be garnished.
You’ll be personally held liable. Liens will be placed on your liquid-able assets.
The other party may even be able to send the debt to collections.
I’m just also confused of how the type of vehicle was over my limit. A new one of that make and model (especially for the fleet/base version since it was a company vehicle) is less than $5k over my limit. And that vehicle was a few years old. Naturally with depreciation would make me think it should be close if not under the cost of what I have as allotted coverage.
This is what has me confused.
I had no idea this was a thing? So if it’s a total accident and you hit someone in Ferrari, you have to pay out of pocket for the remainder? Thats nuts
That’s why it’s important to have the proper coverage. With vehicles getting more and more technical, a bumper could be 10,000 dollars.
If you have some state minimums, you don’t have the protections to cover it. Which is why agents recommend underinsured/ noninsured insurance.
yep in PA minimum property was 10k and I had state minimums. I had a wreck that cost the other driver 16k totaled their viechle. My Insurance paid 10k they salvaged the person’s car for 1k and I had to pay 5k out of pocket.
This is what happens the insurance company will send the balance to a collection agency the agency will call you and you will have an opportunity to work out a payment plan. If you refuse to deal with collections they will sue you and the money will be garnished.
My husband had geico and after his wreck the lady was seeking 100,000. However he only had 85,000 in coverage. The lawyers told him he would be on the hook for anything over 85. The other insurance sent us paperwork and we had to tell them about any assets we had. At the time we had none so they advised her to take the 85 and be happy.
This is why its important to have higher coverage limits. The prices of vehicles these days is insanely high and ridiculous. A client of ours just bought a 2021 Ford F250 lariat and paid 45k for it, but our insurance company has it listed at a value of 53k. And they are carrying coverages at 100/300/100 plus rental at the highest and towing at the highest. Rentals are super expensive nowadays too. The normal 30/60/25 no longer covers anything really unless you hit a 20 year old car. lol
She said she’s living paycheck to paycheck. She probably couldn’t afford the higher coverage.
I understand. We live paycheck to paycheck too. Plus have a teen boy on our policy too. We had up up our deductibles to help lowers ours. And we don’t have that high of coverages. Ours are 50/100/50 and still makes me nervous.
i had a meeting with my insurance agent the other day and we had this exact convo. he told me they could garnish my wages up to 25%. not sure how accurate that is, but it worried me
If you have no assets, the other person’s underinsured coverage is activated. They will, in essence, sue their own insurance company.
when they settle with your insurance company they cannot go after you for more
30 years as a claims manager. Most companies have their own internal subrogation department. They will work with you to set up a payment plan for an amount you can afford. Please do not avoid the conversation. Your driver license can be suspended if you do not set up a payment plan or default on the payments. ** I’m now an agent- talk to you agent and have them shop your coverage. Some companies actually charge less for higher limits because to them, you seem more responsible for choosing higher limits. Everything will work out for you.
I called them back right away when they called me. Now is just the part that’s a waiting game
Personally, I would call my insurance company and DEMAND that they settle it within policy limits so you don’t have to pay out of pocket.. any judgement in excess of your policy limits could expose you to paying those excess damages yourself.. that means garnishing a certain amount of wages from your paycheck and placing a lien on whatever property you do own. If you live with your parents they could come after them too. *speaking from personal experience. Not legal advice.
The other party doesn’t have to settle. You can demand it all you want. Insurance will try, but it’s not always a guarantee.
And if the damages exceed the limits and the other driver has underinsured, their insurance won’t settle.
If this was personal injury, that’s much easier. But this is property damage. Very different.
the insurance company works for you though.. if they want to keep you as a client they will settle
Here is the deal: If you have insurance but not enough to cover the accident–try to get your insurance company to settle the claim within your policy limits. Insurance companies are obligated to attempt to settle claims within policy limits if possible. Usually plaintiff’s lawyers are willing to settle for the policy because nobody wants the hassle of chasing a broke bankrupt defendant for the money. They do not want to chase you. they just want the insurance money. If the damages are massive and the insurance is nowhere near enough–bankruptcy is your option.