QUESTION
Should I keep a small equity loan on my house in case of say a car accident?
Asked on Dec 19th, 2013 on Personal Injury - California
More details to this question:
I own my house. If I was at fault would they be able to take my home seeings it's paid for?
8 ANSWERS
Edwin K. Niles
That's why God made insurance. Make sure you have plenty, and don't worry.
Answered on Dec 26th, 2013 at 4:22 AM
Litigation Attorney serving Irvine, CA
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Law Office of James A. Anton
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If your liability insurance coverage limit on your auto is extremely low then your personal assets could be at risk for any damages in excess of the liability insurance coverage limits. To minimize the risk and to avoid the need to encumber your real property, consider increasing the liability limits on your auto insurance and also consider purchasing an excess liability insurance policy. Excess policies are relatively inexpensive.
Answered on Dec 23rd, 2013 at 10:11 PM
No. You buy automobile insurance at a reasonable level to protect your self from having to pay any excess judgment. The majority of suits are settled for less than $15,000 and verdicts for $100,000 are very rare. There is not that big of a difference in premiums. The plaintiff would first collect from up to the level of the insurance and then only go against you if you had enough in assets to make it worthwhile to them. In most cases the plaintiff takes the $15,000 limits and settles for that amount. Assets in a bank account are also subject to any excess judgment so whether it is equity in your home or in your bank account do not matter. You could also transfer the house to a Trust, but it is not really necessary to protect yourself from any likely suit.
Answered on Dec 23rd, 2013 at 10:11 PM
In Nevada, you can shelter up to $550,000 in equity in your personal residence. Some people keep enough debt on the home to keep the equity under that amount.
Answered on Dec 23rd, 2013 at 10:11 PM
Auto Attorney serving Bloomfield Hills, MI
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Gregory M. Janks, P.C.
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How about buying enough liability coverage on your vehicle such that you needn't worry? If you own a home with another as a joint asset, it can't be attached for any personal liability, but only joint liability. Also I believe there is some type of homestead exemption in bankruptcy, but that it beyond my knowledge set and you'll have to get input from others about that.
Answered on Dec 23rd, 2013 at 10:11 PM
Personal Injury Attorney serving Charlotte, NC
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Paul Whitfield and Associates P.A.
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Your best bet is to have adequate insurance a small equity loan produces only small protection for the holder of the equity loan security. The balance of the value of the house would be lost.
Answered on Dec 23rd, 2013 at 10:11 PM
James Eugene Hasser
If they get a judgment in excess of your insurance coverage, they can go after your personal assets which are not exempt.
Answered on Dec 23rd, 2013 at 10:11 PM
Ronald A. Steinberg
Why don't you just buy auto insurance with policy limits high enough to protect you? Probably $300,000 would be okay, and then, for a very small extra premium on your home owners insurance, you could get an umbrella coverage added on up to $1mil.
Answered on Dec 23rd, 2013 at 10:11 PM