Question:
California has a very low liability limit - $5K, but my husband insists on paying for $50, because he heard that if we were ever in an accident that they could take our house to pay for the settlement.
Answers:
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Your husband is smart to have the higher liability limits but you still don't have enough. The minimum our agency will write is 100000. I said the minimum, we actually quote higher liability limits than that. You always have the choice- do you want to pay a little more each month for insurance or pay out of pocket if you have an accident.How do i get points off from my driving record?
Your husband is right. If you cause an accident and there is substantial damage (physical or otherwise), whoever it is that you hurt can come after you for whatever assets you have to cover the cost of the damagesAbsolutely, well, some states say that they can't "take" your primary home & kick you out, BUT, they certainly can take your bank account, stocks, bonds, put a lien on your house (they will figure the equity you have in it & that will be the lien amount) so, you will never be able to refinance or get a 2nd mortgage & if you sell, the lien do to the accident will get paid first, then you would pay your mortgage off & you will get what little is left, if any. Then, if they still haven't gotten enough to settle the claim, they will attach your wages. You may be paying for the REST of your life. I know of a case several years ago where an older lady got injured & she didn't even go to the hospital after the accident & she was awarded over $200,000. This is in a state where I don't see a lot of lawsuits. I don't know the extent of her injuries but for not even going to the hospital, I thought that was excessive. But, you never know.
Why on earth would you purchase the minimum limit? Even $50,000 is not very much. I always offer $500,000 & if my insured wants lower, I insist they purchase enough to protect their assets (home, bank accounts, etc). It is not that much to increase. Add up what you have, including your home & see if $50,000 covers it, I doubt it, especially in CA. I hope the liability on your home is $500,000 or more (I never write liability on a home for less than $500,000 - & $5,000 medical payments - we have some older policies out there that still have $300,000 but depending on the company it is only $5 or $10 more to increase).
PLEASE think about increasing. You could spend the rest of your life paying off an accident if you don't.
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Absolutely true. Liability is designed to protect you and your assets should you find yourself at fault in an accident. Since you are a homeowner, I think even $50,000 is too low. If you were to seriously injure someone in an accident, that is just not enough coverage. We recommend that homeowners carry minimum liability limits of 250/500/100. Depending on their assets, we usually recommend a $1,000,000 umbrella policy on top of that.I'm taking my Learner's Permit test tomorrow. Got any tips?
Driving is probably the largest risk you take. You've probably worked very hard for your assets and you should take steps to better protect them.
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Your husband is absolutely right. If you have $30,000 worth of liability coverage that means that if you are in an accident that is your fault, the insurance company will pay up to $30,000 to the other party. If they sue you for $200,000 and win, the insurance co will pay for the first $30,000 and you are responsible for the other $170,000. They can go after your house and your assets and the judge can also garnish your wages so part of your paycheck goes to them.Do i need to wait on my insurance documents coming in the post..?
Pay the extra money for higher liability limits. It's not that much more expensive. Comprehensive and collision coverage is much more expensive that liability coverage.
I reccomend nothing less than 100/300/50 liability limits. That means that the insurance company will pay up to $100k per person, $300k per accident and $50k for property damage.
Absolutely - and they can garnish your wages forever, until the judgement is paid. Unless, of course, you have a really fat bank account.
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So, if you kill a guy, you could easily have a judgement of $500,000 after you get sued. Your policy pays $5,000, you have to pay the other $495,000. If you don't cough up a check, look to have your wages garnished and all your stuff confiscated and sold at auction, until the balance is paid.
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