Can I Lose My House Due to an At-Fault Car Accident?
When you’re involved in a car accident, especially one where you’re at fault, there’s a lot that goes through your mind. One of the scariest thoughts is whether you might lose your house because of it. It’s a fair question and one that needs a simple, straightforward answer, especially if you’re living in California.
Liability in California
California operates under what’s known as a "fault" system, which means that the person found to be at fault for the accident is responsible for paying for the damages. These damages can range from property damage to medical bills, and in more severe cases, even pain and suffering.
While your car insurance typically covers these costs up to your policy limit, what happens if the damages exceed that amount?
If the damages from the accident surpass your insurance coverage, the injured party could potentially come after your personal assets to make up the difference. This could include your savings, investments, and yes, even your home.
However, this doesn’t mean you’ll automatically lose your house. California has certain protections in place, but it’s important to know how they work and what you might be up against.
In California, liability in a car accident is determined by who’s at fault, meaning the person responsible for the accident bears the financial burden. If you’re found to be at fault, you’ll need to cover the damages, which can sometimes exceed your insurance coverage. The injured party may also look beyond your insurance and go after your assets to make up for any shortfall.
The Homestead Exemption
One of the key protections in California is the homestead exemption. This law provides homeowners with a level of security by protecting a portion of their home’s value from creditors.
According to the Sacramento County Public Law Library, the homestead exemption in California ranges from $300,000 to $600,000, depending on the median sale price of homes in your county. This means that if someone tries to force the sale of your home to collect on a debt, you’d be entitled to keep that exempted amount.
For example, let’s say you have $400,000 worth of equity in your home and you’re entitled to a $400,000 homestead exemption. If a creditor attempts to go after your home, they wouldn’t be able to touch that equity. However, if your equity exceeds the exemption amount, that excess could be at risk.
The homestead exemption acts as a safety net, shielding a portion of your home’s equity from creditors if they attempt to force a sale. This protection is crucial, especially if the damages from an accident exceed your insurance coverage.
While the exemption won’t cover everything, it does offer some peace of mind by guaranteeing that a portion of your home’s value remains untouchable, giving you a better chance of keeping your home even if things get tough.
Why Insurance Matters
Most of us have car insurance, and if you’re like many Californians, you probably haven’t thought much about your coverage limits beyond what’s legally required. Those limits, however, can play a big role if you’re found at fault in a car accident.
According to the State of California DMV, the state’s minimum liability insurance coverage requirements are $15,000 for the injury or death of one person, $30,000 for the injury or death of multiple people, and $5,000 for property damage.
This is why it’s crucial to carry more than the state minimums for liability insurance. If you have significant assets, including your home, it might be wise to consider an umbrella policy. Umbrella insurance provides additional liability coverage beyond your standard policies and could be the safety net that keeps your house off the chopping block.
How Can a Personal Injury Attorney Help?
In California, if you’re sued for damages following an at-fault car accident, the plaintiff’s attorney will likely pursue the maximum compensation possible. This could include going after your home if they believe your insurance won’t cover the full amount.
A personal injury attorney doesn’t just represent plaintiffs; they also represent defendants. If you're on the receiving end of a lawsuit after an accident, having a skilled personal injury attorney in your corner can help protect your assets.
They’ll work with you to help negotiate settlements, challenge the extent of the damages claimed, and potentially keep the case out of court, where the stakes could be higher. It’s worth noting that litigation isn’t always necessary, but when it is, it’s crucial to have an attorney who can effectively "sell" your case in the courtroom.
When Lawsuits Lead to a Judgement
If the case does go to court and a judgment is made against you, the plaintiff could place a lien on your home. This doesn’t mean they can immediately force you to sell your house, but it does mean that when you do sell, the lien would need to be paid off from the proceeds. This can complicate things, especially if you aren’t planning on selling anytime soon.
However, as mentioned earlier, the homestead exemption can protect a portion of your home’s value from this kind of judgment. The key is making sure you understand your rights and have the right legal representation to protect your interests.
Steps to Protect Yourself
While the thought of losing your home due to a car accident is frightening, there are steps you can take to protect yourself. Here’s a simple list of actions you can consider:
Review your insurance coverage: Make sure your liability limits are high enough to cover potential damages in a serious accident. Regularly checking your coverage can help you avoid unexpected financial surprises.
Understand the Homestead Exemption: Familiarize yourself with the homestead exemption in California and how it applies to your situation. Knowing this can be a key part of your financial defense strategy.
Hire a personal injury attorney: If you’re sued following an at-fault accident, don’t go it alone. Having an experienced attorney on your side can greatly increase your chances of protecting your assets.
Consider asset protection strategies: Speak with a financial advisor or attorney about additional ways to protect your assets, including your home, from potential creditors. Planning proactively can give you peace of mind for the future.
If You May Lose Your Home Due to a Car Accident, Reach Out
Nobody wants to think about losing their home, especially after something as stressful as a car accident. The reality is, that if you’re at fault and the damages exceed your insurance coverage, your assets could be at risk. Fortunately, California’s laws provide some protection, and with the right steps, you can reduce the likelihood of losing your house.
At our firm, we understand the challenges of protecting what you’ve worked hard to build. Our lead attorney isn’t just another lawyer; he’s someone who’s been in your shoes and knows the value of a home. He’s down-to-earth, relatable, and a fierce advocate for his clients. When the stakes are high, and your home is on the line, you need someone who can fight for you in and out of the courtroom.
So, if you’re facing the possibility of a lawsuit after a car accident, don’t wait. Reach out to us at G. Aldrich Law today. We’re here to help protect what matters most—your home, your assets, and your peace of mind.
We serve clients in Lakeport and Woodland Hills, California as well as Lake County, Los Angeles County, Colusa County, Riverside County, and the surrounding counties in Northern and Southern California.