If you are sued after a crash, your liability insurer generally has a duty to defend you and pay covered damages up to your limits. Problems arise when a judgment exceeds your coverage.
First steps
- Do not ignore the summons and complaint.
- Notify your insurer immediately and send the papers.
- Let the insurer provide a defense lawyer.
- Do not discuss the case with the other side.
- Keep records and cooperate.
If damages exceed your limit
You can be personally responsible for the excess. A judgment can lead to wage garnishment, bank levies and liens, subject to exemptions that vary by state. You may want your own lawyer to advise you about the excess exposure.
What may be protected
- Certain retirement accounts.
- A portion of home equity under homestead laws.
- Some wages and benefits.
- A basic vehicle or personal property up to limits.
Prevent the problem
Carry adequate liability limits and consider an umbrella policy. See our guides to collecting a judgment and to wage garnishment rules.
Frequently asked questions
Will my insurance rates go up?
Often yes after an at-fault claim.
Can I settle on my own?
Policies usually give the insurer control, so coordinate with it.