Can I Lose My House Due to At-fault Car Accident in Florida?

In Florida, you cannot lose your home due to an at-fault car accident judgment as long as the property qualifies as your Florida homestead.

Florida’s homestead law offers some of the strongest protections in the country. A judgment creditor, including someone injured in a car accident, cannot force the sale of your homestead to satisfy a civil judgment.

When Is a Home Protected from a Car Accident Lawsuit?

Your home is protected if:

• It is your primary residence.
• It is located in Florida.
• It fits within the land size limits (up to ½ acre in a city or 160 acres in unincorporated areas).
• You own it in your individual name, not inside a business entity like an LLC.

If these conditions are met, even a large judgment from a serious car accident cannot result in the forced sale of your home.

What Happens If I Am Sued After an Accident?

If you’re found liable in a car accident and your insurance doesn’t cover all damages, the injured party can get a judgment against you. That judgment can be used to collect from non-exempt assets such as bank accounts, investment accounts, business interests, and non-homestead properties.

But your homestead residence will still be protected.

The only exceptions would be if your property doesn’t qualify as a protected homestead, such as being over the lot size limit. In addition, if you own your home in a corporation or LLC, it would not qualify as a protected homestead.

If you own other properties, those may be at risk if a court orders you to pay a judgment exceeding your insurance coverage. Additionally, the exemption does not protect against foreclosure or unpaid property taxes.

How to Protect Your Home Against a Car Accident

1. Maintain Adequate Auto Insurance Coverage

Florida requires all drivers to carry a minimum of $10,000 in personal injury protection (PIP) and $10,000 in property damage liability (PDL). However, these limits may not be enough in a serious accident. Adding bodily injury liability (BIL) and uninsured/underinsured motorist (UM/UIM) coverage can help protect your assets.

2. Purchase Umbrella Insurance

An umbrella policy provides additional liability coverage beyond standard auto insurance. It can cover legal fees and judgments exceeding your primary policy limits, offering extra protection for your home and other assets.

3. Use an Asset Protection Trust

An offshore trust protection trust can help shield non-homestead properties from potential car accident liability

4. Transfer Property to Multi-Member LLC

Property owned by a multi-member LLC is effectively protected from personal car accident liability. A creditor is limited to a lien on distributions from the LLC and cannot access the property itself.

Homestead Protection in Florida vs. Other States

Florida is renowned for having one of the strongest homestead protections in the nation. In fact, Florida is one of only a few states that offer an unlimited dollar-value exemption for your primary home’s equity. This means no matter how much your Florida homestead is worth, a judgment creditor (like an accident victim with a court judgment) cannot force the sale of your residence, provided it sits on no more than half an acre in a city (or up to 160 acres in a rural area). By contrast, most other states impose a dollar cap on homestead protection or offer far weaker safeguards.

For example, Texas also has an unlimited homestead exemption by value (with a 10-acre urban / 100-acre rural size limit), and states like Kansas and South Dakota similarly protect an unlimited amount of home equity. However, many states offer only limited protection. Nevada caps protection at around $605,000 of equity, and California’s homestead exemption ranges from about $300,000 to $600,000, depending on the county.

Some states provide virtually no meaningful homestead shield. For example, New Jersey and Pennsylvania have no general homestead exemption protecting residents from judgment creditors.

Florida Lets You Protect Non-Exempt Assets in a Florida Homestead

Another unique aspect of Florida law is the ability for residents to convert non-exempt assets into a homestead without losing protection. In Florida, you can sell vulnerable assets (like cash or investments) and sink the money into your primary home, even on the eve of a lawsuit, and still benefit from full homestead protection.

This tactic is generally not available in other states. For example, Texas law does not clearly allow last-minute asset conversions into a homestead for creditor avoidance, whereas Florida’s constitution and courts (see Havoco v. Hill) explicitly protect such conversions so long as the funds were not obtained through fraud.

Florida’s homestead exemption stands out both for its unlimited scope and for the flexibility it gives debtors in shielding assets, making it a debtor-friendly state for those concerned about losing their home in a car-accident lawsuit.

Example Scenarios

Scenario 1: Homestead Protection in Action

John, a Florida homeowner, causes a serious at-fault car accident resulting in a $300,000 judgment against him. He carries only $100,000 of liability insurance. After the accident, the injured party’s lawyer considers John’s assets. John’s primary residence in Orlando is his homestead, so it cannot be forced into a sale to pay the judgment. John also holds his bank account jointly with his wife, meaning the account is owned as tenants by the entirety. This makes it off-limits to a creditor of just John alone. Additionally, John is the sole breadwinner (head of household) for his family, so his wages are exempt from garnishment under Florida law. With John’s major assets effectively protected, the victim agrees to settle for the $100,000 insurance payout.

Scenario 2: When a Second Property Is at Risk

Susan owns a primary home in Florida (her homestead) and a beach rental condo. She causes an accident, leading to a large lawsuit verdict above her insurance limits. Florida’s homestead law protects her primary residence, so the plaintiff cannot touch Susan’s home. However, the vacation condo is not homestead property, so the creditor records a judgment lien on that property. The lien doesn’t immediately force a sale, but it prevents Susan from easily selling or refinancing the condo without paying off the judgment. Eventually, the creditor moves to foreclose the lien, and Susan is forced to sell the condo to satisfy the remaining judgment.

Scenario 3: Converting At-Risk Assets into a Homestead

Michael has substantial savings and investments, but no asset protection plan. He causes a devastating car accident and faces a potential lawsuit. Fearing a huge judgment, Michael quickly uses $250,000 of his non-exempt savings to pay down his mortgage and add an addition to his Florida home. In many states, this tactic wouldn’t work, but Florida law allows a debtor to transfer non-exempt assets into an unlimited-value homestead for protection. This conversion of cash into home equity is reversible as a fraudulent transfer under Florida’s Constitution (as long as the funds weren’t derived from crimes or fraud).

When the victim eventually wins a large judgment, Michael’s now-expensive homestead remains untouchable.

Frequently Asked Questions

Can I lose my home after an at-fault accident in Florida?

No— Florida’s constitutional homestead exemption prevents forced sale of your primary residence to satisfy most civil judgments, including those arising from car accidents.

What rules determine if my house qualifies for homestead protection?

Your home must be your permanent residence and fit within land limits (½ acre in a municipality or 160 acres outside) to receive the full protection.

Can creditors place a lien on my home even if it’s exempt?

A creditor can place a lien on a Florida homestead, but they cannot force a sale to occur. That lien won’t result in foreclosure as long as the homestead exemption remains valid. A debtor can sell the property free and clear of the lien if it is the debtor’s homestead at the time of the sale.

What happens if I use proceeds from selling my homestead?

If you sell your homestead and intend to reinvest in another Florida homestead, those proceeds can remain exempt if kept separate and reinvested within a reasonable time.