Auto Insurance Claims: my wife was at fault how to settle the claim made against my insurance, Potential Excess Liability

Question
My wife had an accident in Jan 2010. She was at fault. The other party made bodily injury claim to my insurance. My insurance company sent me a copy of the claim form the other parties' lawyer in February. In June last week again progressive sent me a letter asking if have any other umbrella insurance/ any other forms of coverages. It further informed me that the claim could exceed my BIL limit. In that case I will be held responsible for verdict over the limit. it also informs that I have a right to take the advise of my attorney and progressive will cooperate in that. My question is shall I consult an attorney or not. Please give some guidance. I don't have any property other than a car some money in bank.

Answer
Kangabam,

  I would never advise someone not to seek legal advice.  Now, you are what we call "judgment proof".  This means that even if Progressive sues you, they will get nothing out of it but a piece of paper that says you owe them money.  I would guess that Progressive's subrogation department is trying to feel you out and see if you have the assets to settle a judgment.  They have two choices, take the limits on your policy and sign a release (leaving you in the clear), or they don't get anything.  Your insurance company should provide an attorney for you, I would contact my carrier, ask who the attorney is, and call them directly to discuss your options.  Insurance contracts can be tricky to navigate, but your insurance company should do everything in its power to protect you from liability.  They should not pay out limits on the claim without obtaining a release on your behalf.  If they do this without your knowledge, you may be able to press a "breach of contract" matter or a "bad faith" claim.  This is not legal advice.  

  Call your carrier and stay in the loop.  I don't know if you are dealing with Progressive's subrogation representatives or if you are dealing with a private party's attorney, and that is important for me to know in order to properly advise you.  Either way, there is no lawsuit until you have been formally served suit papers.  Until you are served suit papers, let the insurance companies handle it.