Can I Lose My House Due to an At-Fault Car Accident in California?

by Staff Blogger | October 31st, 2022

Your California auto insurance policy should cover injury claims filed by other drivers and passengers if you are at fault. However, your insurance may not fully cover injured victims’ medical and repair costs.

A judgment in a lawsuit could put your financial assets at risk, including your home, if an injured party sues you. Knowing your policy’s limits and protecting your economic well-being are essential to avoiding financial ruin from an auto accident lawsuit.

Speak with a car accident attorney from Berg Injury Lawyers when facing liability in an accident to help you protect your assets and minimize damages.

What Should You Do After a Car Accident?

After a car crash, the first thing to do is ensure that all drivers and passengers are safe. Once that’s done, the following steps are crucial to protecting you and your financial future in the immediate aftermath of the accident.

  • Call the police and ask for emergency assistance to treat any injuries at the accident site.
  • Stay calm and never admit fault to drivers, passengers, witnesses, or police.
  • Answer any questions the police officer may have about the accident, so they can investigate the scene and determine who is at fault.
  • Exchange contact information, insurance policy numbers, and license plate numbers with other involved parties.
  • Report your accident to your auto insurance company.
  • Reach out to an auto accident lawyer.

What Happens if I’m at Fault in a Car Accident in California?

In California, the at-fault driver is legally required to pay for the damages that they cause in a car accident. After an accident, an injured victim can file a claim against you, seeking compensation for medical bills, lost wages, property damage, and pain and suffering.

If your auto insurer determines you are at fault, it will pay a settlement to cover the victim’s injuries and property damage within your policy’s limits.

Does Insurance Cover Things That Are Your Fault?

California auto insurance policies require all drivers carry liability coverage for personal injuries and property damage. Your insurance company will pay the crash victim’s medical or vehicle repair expenses if the accident is your fault.

All auto insurance policies differ, but if you have the minimum amount required by state law, your insurance will pay the following amounts:

  • Up to $15,000 for death or injury to one person
  • Up to $30,000 for injury or death to more than one person
  • Up to $5,000 in property damage

These amounts are the minimum allowed by California, so you may get insurance with higher limits for more protection. Alternatively, if you drive without insurance illegally, you put yourself at financial risk if you cause an accident.

What to Do if Someone Sues You for a Car Accident in California

You could face a lawsuit if the other driver or passenger’s damages exceed your insurance policy limits. A car accident lawyer can create a legal defense strategy to ensure your assets are protected.

You must also inform your insurance company about the lawsuit so they can reasonably defend you and settle the lawsuit. This protects you from further liability in case of a potential judgment.

How to Protect Assets After a Car Accident in California

Safeguarding your assets is essential following an accident to avoid having to pay personally. Additionally, it can improve your ability to negotiate a fair settlement with the other party.

  • Identify any protected assets with a financial planner if the injured party wins a lawsuit. California’s homestead exemption can protect your home from collection up to a particular value. To qualify for this exemption, your home’s equity must be either $300,000 or equal to the countywide median sale price for a single home not exceeding $600,000.
  • Consider buying an umbrella policy in addition to your auto insurance liability coverage. For instance, a judgment could be $45,000, but your liability coverages are only $15,000 for bodily injury and $5,000 for property damage under California insurance law. The umbrella policy can pay for the remaining difference of $25,000.
  • Your insurance company may request a financial affidavit showing your assets, income, expenses, and debts. This process helps the injured party decide if they should negotiate a fair settlement or pursue a lawsuit in court for judgment.

What Happens if You Lose a Car Accident Lawsuit?

If you lose a car accident lawsuit, you may be forced to pay the injured victim’s settlements. The court may go after your personal assets, such as your savings accounts and personal property, if your liability coverage and financial resources are insufficient to satisfy the judgment.

Should I Get a Lawyer for a Car Accident That Was My Fault in California?

The car accident attorneys from Berg Injury Lawyers can protect your legal interests and financial assets if you are at fault for the accident. We can evaluate the facts of the accident to find out what happened in a free initial consultation. We can also advise you on dealing with your insurance company and any potential lawsuits from the accident.

Speak with one of our attorneys today to review your case and determine your options for protecting your assets. Schedule a consultation through our live chat app, by phone, or by online message.