After a car accident, asset protection can set up legal shields to keep your property safe if you get sued after a crash. It often involves using trusts, LLCs, or other protections under Florida law to make it harder for someone to take your money and property.

Car Accident Asset Protection

Steps to Take If You Are at Fault in a Car Accident

  • Contact an attorney immediately to understand your legal options.
  • Notify your insurance company.
  • Review your assets to see what is at risk of collection.
  • Set up a plan to protect your assets in case the lawsuit does not settle.

If you’re being sued for a car accident in Florida, immediately notify your insurance company and consult with an attorney. Avoid direct communication with the plaintiff, as your insurer and lawyer will handle most of the communications and defense. Understand that Florida’s comparative negligence rule could reduce your liability if you are found partially at fault.

In Florida, you can still take steps to protect your assets even after the accident has happened. Certain assets, like your primary home, specific retirement accounts, and annuities, may already be protected from creditors under Florida law. You can protect most assets as long as you avoid making a fraudulent transfer.

Being Sued for a Car Accident

Even after a lawsuit is filed, you can often legally take steps to protect your assets from an eventual judgment.

Florida law exempts from collection various assets, such as retirement accounts, homestead, head of household wages, and tenancy by entireties assets against separate debt. You may be able to take better advantage of statutory exemptions even after the accident has occurred.

We help clients throughout Florida.

Our attorneys give customized advice about specific steps to protect your assets from creditors. Our consultations are offered remotely by phone or Zoom.

Alper Law attorneys

Protecting Assets After a Car Accident

To protect your assets after a car accident, you should (1) assess whether the damages are within the policy limits, (2) determine which assets are vulnerable to collection, (3) implement a plan to protect those assets, and (4) submit a financial affidavit that demonstrates the difficulty of collection on a money judgment.

Protecting assets after a car accident in this way involves taking advantage of the many protections provided by Florida statutes and common law as soon as possible.

Tip: We sometimes hear from our clients that they think it is too late to protect their assets after a car accident. In our opinion, there are almost always steps that can be taken to improve their position.

Does Insurance Protect You from Car Accident Liability?

Car insurance, specifically liability coverage, can protect you financially if you’re found legally responsible for damages or injuries in a car accident. This coverage pays for repair costs, medical expenses, and other compensation required by law to the other party up to your policy’s limits. However, it doesn’t cover your injuries or vehicle damage. For that, you need collision or comprehensive coverage. And it doesn’t cover any damages beyond the policy limits.

Adequate liability insurance, including an umbrella policy, is the best asset protection against car accident liability. In most cases, the injured party’s attorney will settle their claim for an amount within the limits of the defendant’s insurance. The reason is that the plaintiff’s goal is to get the most money for the least amount of effort. They want quick settlements, not protracted litigation. An insurance settlement includes a release of the car driver and owner. The car owner and driver will not have personal liability if the plaintiff’s claim is resolved and paid by insurance.

But sometimes, car accident cases do turn into lawsuits, particularly if the driver carries minimum insurance or the defendant appears to have substantial unprotected assets. When the at-fault driver and car owner maintain an insurance policy with inadequate personal injury limits, the injured person may decide that they can collect more money through litigation and a money judgment than through an insurance settlement.

Defendants with inadequate insurance need properly planned asset protection to avoid collection on a personal judgment and to improve their negotiating position during the settlement process.

Being sued for a car accident, researching what assets they can take

Can You Lose Your House Due to a Car Accident?

Under the Florida homestead exemption law, an at-fault driver cannot lose their home from a car accident lawsuit. No matter how much the other person is injured, the Florida homestead exemption protects the home of the at-fault driver.

Under Florida law, the homestead exemption protects an unlimited amount of value, but it is limited to a house situated on a half-acre lot in a city and 160 acres in an unincorporated county. There may be other exemptions that protect the at-fault driver’s house, including tenants by entireties protection.

If You Are Being Sued for a Car Accident, What Can They Take?

If you are being sued for a car accident, a judgment creditor can potentially take (1) non-exempt bank deposits, (2) up to 25% of net wages, (3) non-homestead real property, (4) equity in vehicles, and (5) any other non-exempt personal property. However, Florida law can exempt some or all of a person’s property and provides many ways to protect assets from judgment collection.

In terms of collection, Florida law provides a judgment creditor with various tools to help collect a personal money judgment from a car accident lawsuit. For example, the creditor may examine nearly all the debtor’s financial documents, including bank records, tax returns, and wage statements. The judgment creditor can take the debtor’s deposition under oath and obtain detailed information about the debtor’s assets and financial history. Therefore, planning to hide assets from a potential judgment creditor is not a good asset protection plan.

Writs of garnishment directed against the defendant’s bank accounts and their wages are usually the plaintiff creditor’s most effective tool to collect money following a car accident judgment. A judgment creditor may obtain a writ of garnishment from the clerk of court and proceed to serve the writ on the debtor’s bank. Upon receiving the writ of garnishment, a bank will freeze all bank accounts that include the debtor’s name on the account title.

The bank must file a formal response to a writ of garnishment that states how the frozen accounts were titled and how much money was in each of the debtor’s accounts when the bank was served with the garnishment documents. The debtor has an opportunity to dissolve the garnishment freeze if the debtor can show that the money in the bank accounts is exempt from collection under Florida law.

The plaintiff can also garnish wages payable to the judgment debtor. The plaintiff can direct the debtor’s employer to withhold and pay to the plaintiff up to 25% of the debtor’s wages net of tax withholding and other required deductions. Wage garnishments remain in effect continually during the debtor’s employment or until the debt is paid.

Florida law provides debtors defenses to these creditor collection tools. Debtors who qualify as head of family (also called head of household) under Florida law are usually exempt from wage garnishment.

In addition, wages of a head-of-household deposited into a bank account retain their exempt character for up to six months. A debtor may have other defenses against wage garnishment based upon procedural defects in the creditor’s garnishment.

Bank accounts are exempt from garnishment if owned jointly with the debtor’s non-debtor spouse as tenants by entireties or if the accounts hold money exempt from collection such as social security, disability, or annuity proceeds.

Should You Fill Out the Financial Affidavit After a Car Accident?

Summary: most people should fill out a financial affidavit after a car accident. Most cases settle and filing out the affidavit helps the case settle. However, if you have significant assets and the claim is high, you may not want to fill out the financial affidavit.

Soon after a car accident, an insurance company may request that an insured defendant fill out a financial affidavit. The plaintiff and insurance company want information about the defendant’s assets to decide if they should settle within insurance policy limits or pursue the defendant for a money judgment.

Florida law does not require you to submit an asset affidavit. That said, sometimes the financial affidavit is helpful. The defendant wants to demonstrate that collection of a civil judgment would be difficult. In that case, the plaintiff is more likely to settle with the insurance company for an amount within the policy limits.

It is important that the defendant review their asset protection situation before submitting an affidavit. An affidavit is signed under oath, and the defendant does not want to intentionally falsify asset information on the affidavit. The defendant can employ asset protection tools to increase protection first and then send in the affidavit.

The at-fault driver’s best course is to review their asset protection status, fix any issues, and then consider a financial affidavit. A well-planned financial affidavit can increase negotiating leverage leading to a settlement that avoids a lawsuit.

We help clients throughout Florida.

Our attorneys give customized advice about specific steps to protect your assets from creditors. Our consultations are offered remotely by phone or Zoom.

Alper Law attorneys

Being Sued for a Car Accident When You Have No Assets

Lawsuits are expensive and time-consuming. Most car accident plaintiffs and their lawyers prefer a quick and easy insurance settlement, no matter how small, rather than filing a lengthy, expensive, and risky lawsuit against someone who does not have any assets.

The same applies to people who do have some or even a substantial amount of assets but who are able to protect those assets from creditors.

FAQs about Car Accident Liability

These are our answers to some of the most common questions we receive about car accident liability in Florida.

What assets can they take if you are being sued for a car accident in Florida?

In Florida, if you are sued for a car accident and lose the case, the plaintiff may be able to seize non-exempt assets to satisfy the judgment, such as cash, stocks, and non-homestead real estate. Personal property up to a certain value and wages for head of family are protected under Florida’s exemption laws. Assets like your primary residence (under the homestead exemption), retirement accounts, and certain personal property are also protected from creditors.

How much can someone sue for a car accident?

Some states limit the amount you can sue for for a car accident. Florida does not. There are no caps on economic or non-economic damages in Florida.

The amount must be documented and supported by evidence of damages. Car accident damages include medical bills, pain and suffering, loss of future earnings, and ongoing damage for loss of functioning.

It does not matter if the injured person has medical insurance. Medical bills (which can be very high) are included in the amount of damages. Effective asset protection may be able to protect your assets from a claimant.

Can someone sue you personally after a car accident?

In Florida, a person injured in a car accident is entitled to sue the at-fault driver and the owner of the at-fault driver’s vehicle. The car owner’s liability for an accident caused by a permissive user is capped at $100,000 per person/$300,000 per incident if the owner is sufficiently insured, and $600,000 if the user is uninsured, pursuant to Florida Statute 324.021. While most car accident cases will settle within the policy limits, cases that do not settle can result in a lawsuit.

Can someone sue you after your insurance pays or settles?

In most cases, a person cannot sue you after your insurance pays the plaintiff. If the at-fault driver’s insurance company settles with the injured person, the settlement documents will include a release of all claims. A release means that the injured person cannot afterward sue the at-fault driver or the vehicle owner.

For how long can someone sue you after a car accident?

An injured person has four years after a car accident to sue the at-fault driver or the owner of the at-fault driver’s vehicle. The four-year timeline stems from Section 95.11 of Florida law.

What happens if you lose a car accident lawsuit?

If you lose a car accident lawsuit in Florida, the injured person becomes a judgment creditor. They can use various judgment collection tools to collect on their judgment.

However, proper asset protection planning could make it difficult for the judgment creditor to collect on their judgment. Florida residents have available some of the strongest asset protection tools in the country.

What happens if someone sues you for more than your insurance covers?

If an injured person wins a lawsuit against you for an amount more than what your insurance covers, your insurance policy will still pay the amount of the liability policy limit toward satisfaction of the judgment. You would be responsible for the balance of the monetary judgment. However, effective asset protection makes it difficult for the injured person to collect on the balance of the judgment.

Do you have to provide a financial affidavit after a car accident?

Florida law does not require you to submit a financial affidavit after a car accident.

Can you still protect your assets after a car accident?

Yes, you can still protect your assets even after a car accident. Many asset protection strategies work both before and after a lawsuit is filed.

How do car accident lawsuits work in Florida?

Florida car accident lawsuits require proving the other driver’s negligence caused the accident. The lawsuit must be filed within a specific time frame. Car accident lawsuits seek compensation for damages and injuries under Florida’s no-fault insurance system.