Auto Insurance Claims: Daughter involved in a car accident, underinsured motorist coverage, personal assets

Question
My 19 year old daughter was involved in a head-on collision in CA. The police report found her at fault. She is OK, but the other driver has fractures, and maybe other injuries, we are not fully informed. The car belongs to me and my husband, the insurance policy is in our name and our daughter is named as insured driver. She does not work and lives with us. Our policy limit is higher than the minimum required, but maybe will not be enough considering that the other party has serious injuries. Our insurance asked us to disclose the limit on the policy to the other party attorney and we agreed.
Can they sue me and my husband for any damages over the policy limits and what are the consequences for our daughter?

Thank you!


Answer
Hi Mima,

First, I hope that your daughter was not injured.  Second, you did the right thing to disclose the limits to the other party.  That attorney is not likely to sue since she has her client's Underinsured Motorist Coverage (UIM) to go after and it is a lot easier to go through an arbitration with your own UIM adjuster than it is to undertake a jury trial versus the tortfeasor.  

Hence, the attorney will demand policy limits from your carrier and then she will pursue the UIM limits of her insured.  Once your carrier settles with the victim, then that is it so far as you are concerned.  Your insurer will pay out your policy limits in exchange for the victim signing a full release from liability for the accident.  Once that release is signed, there is no way that the victim gets to come after you or your daughter.

If the victim elects to forego the offer of policy limits and to pursue you on his own, then your company will hire an attorney to defend you and to try to keep the amount of any judgment down.  It is at that time you need to ask about hiring your own attorney to defend you regarding your personal assets.

There is plenty of time to worry about this.  For example, naming a piece of property as your homestead exemption can be done now or at any later time.  

The fact that your daughter lives with you and that the vehicle could be proven to have been used for family purposes leads me to wonder whether the family car doctrine could be invoked to bring you into the liability picture.  That is a possibility.  But your attorney can discuss the chances of that happening, and there is no hurry just yet to go out and hire anyone right now.  Just wait to see how the victim's attorney handles things.  My bet is that she will take your limits, and that will release both you and your daughter from any liability.  You will hear nothing further from them since I expect that they will go this route, and once they take your limits, then you are going to be completely released.

I trust that my time here has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.

Best Wishes,


Dr. Settlement, J.D. (Juris Doctor)
Http://www.SettlementCentral.Com