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Not looking for legal advise here - just looking to educate myself on auto liability insurance in New York State and personal exposure beyond a policies liability limit.
Let's say that I have an auto policy with a 300K liability limit and that I get into an accident where I am determined to be at fault. The accident results in severe bodily harm to several other individuals in the other car and they all bring lawsuits against me - which total well beyond my 300K liability limit. Assuming the other parties win - my insurance company covers me up to 300K - and I'm on the hook for the rest - right? Can they come after my personal assets? The equity in my 1/2 of our home (I'm assuming they can't touch the equity in my wife's 1/2 of our home if I'm the one being sued), my IRA? bank accounts? 401K? my cars?
I happen to have a 1M liability limit - but a family member (with two teenage boys driving in the household) chose a 300K limit because they were told that it was unlikely that they would ever get sued beyond their policy limit - and even if they were they could never lose their house. While not a lawyer - I did not agree with what they were told.
Thanks in advance for your comments all...
Last edited by SouthBound3; 09-15-2012 at 10:17 PM..
my brother inlaw was awarded an amount in a case that went beyond policy limits of the auto policy.
my brother inlaw was gong straight on his motorcycle when someone was waiting behind someone else waiting to make a left turn.
this person that was behind the person who didnt make his left fast enough made his left cutting around the first person and hit my brother inlaw.
in this case my brother inlaws attorney was looking at an insurance company settlement out of court for 30 or 40k...
allstate said no they wouldnt settle.
the day of the trial allstate offered 50k and my brother inlaw said no .
so it went before the court. the judge ruled it was a violation because the guy making the left had to go over the double yellow line because there already was someone in the intersection waiting to make a left.
the judge told the jury dont decide the liability as he is deeming it a violation 100%.
he instructed the jury to just come up with an award.
they did and it exceeded the policy.
all state rather then face a law suit from their insured for putting him in the spot he was in by not settling out of court for 40k covered the overage so as to avoid another suite.
^^^ Just an FYI a motorcycle case is completely different than any other. A person injured on a m.c. doesn't have to meet a "verbal threshold" that NY has for injuries. You get money no matter what, even if you only have a scrape.
Please do not base anything on a motorcycle case.
OP, I think your friend/neighbor/you are misunderstanding what was said. People are almost ALWAYS sued for 1 million dollars and up. In all the years I've handled auto insurance lawsuits, I've seen exactly one case that was filed in the lower court for about $25K. Clearly the attorney was clueless.
Is it true that most cases SETTLE for less than the policy limit? Yes. Probably 99% of the time that is what happens.
But, I have seen cases where the insured had to chip in money for the settlement. One of these insureds was insured for over $2,000,000 but he still had to chip in money. The woman he hit was so badly injured she had no quality of life afterward. We're talking amputations and blindness and she was a widowed mom.
Bottom line is, it's very hard to get an umbrella policy in NY these days. Sounds like people are being told "oh don't worry about it" because they can't get one. Not good. That's an agent that needs to keep up their E&O insurance.
Your insurance co. will pay for your defense regardless of the amount that you are sued for. And defense costs are separate from your policy limit. HOWEVER, punitive damages are NOT covered by your policy and you'd have to retain counsel on your own for that defense and pay any award out of pocket. Again, most cases do not go to trial. Having a plaintiff attorney sue for punitive would be fairly rare and you'll find it in cases where a driver is wantonly reckless (ie, the Taconic Parkway mom who went the wrong way and killed a bunch of people).
And yes, your personal assets are at risk. Let's say you hit and kill someone who just graduated from MIT and had a bright future ahead of them. Let's say they lingered in the hospital for a month before they succumbed. You're going to be on the hook for both their future earnings based on actuarial table (so in this case a good 50+ years of earnings) plus their "pain and suffering" while in the hospital (4 weeks is a long time but I had a case where the woman was there for 6 before she passed unexpectedly). That's a whole lotta money. You have 1 million umbrella and $250K underlying. Probably not going to be enough. The plaintiff attorney will do an asset check on you to see if it's worth it to go after you personally or just take the money and run. That's what happened in the case I mentioned above where the guy had to chip in. He was a hugely successful doctor living in a $1.5 mil house (a lot at that time) and had a ton of assets.
unless the court is looking to make an example like bernie getz and his civil suit usually they will take the policy and call it a day if you have no assets to go after.
what assets they can go after are up to each state. taking someones home in florida is near impossible. in other states its allowed. retirement assets in 401k's may be off limits , etc..
the best thing to do is get an umbrella policy and keep your fingers crossed because even there they have exceptions to what they will cover.
we found out in our hoa in PA where we have a 2nd home our umbrella wont cover a liability caused by others that hold us accountable.
such as we have a civillian safety patrol that patrols our grounds with volunteers.
if they chases a kid on one of the atv's who shouldnt be in the hoa and he is severly injured or killed any award that exceeds the hoa policy is passed to us.
geicho said our umbrella only covers acts done by insured , not acts of others so we would not be covered.
if we shoot a burgler and he sues us and wins a civil suit our umbrella wont cover intentional acts.
Allstate went thru a period where they refused to settle anything. It was a massive pain to be their co-defendants on anything. All it did was back up their inventory of cases and cause judges to hate them. Hence, the scenario above. Was this in the 90s?
In an answer, theoretically all of your personal assets are at risk in NYS and you can thank Shelly Silver for that. NYS has some of the most archaic tort and litigation laws in the country. That's why you see and hear so many personal injury lawyers advertising on radio and tv. Additionally, NYS has the highest no-fault insurance fraud rate in the country.
Having said that, unless there was a fatality or loss of limb, the lawyers will dance all day only to settle. In less than major injuries, the settlement amount will be whatever your lawyer can negotiate down. In more serious suits, the settlement may be as high as the coverage limit (usually $300k).
I'll also correct my initial post because it turns out the family member I referenced actually has $100K coverage (per person) with $300K being the maximum per accident (I assume $100K x 3 people).
In the event of a serious accident - $100K coverage per person just doesn't seem like a lot to me at all.
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