Understanding Liability Risks After an At-Fault Accident with Liability-Only Coverage
If you’ve recently been involved in a car accident where you’re at fault and your insurance policy only includes liability coverage, it’s natural to have concerns about potential financial repercussions. Here’s a comprehensive overview to help you grasp what might happen next, especially if you’re in a situation similar to an international student in California.
Scenario Overview
Suppose you were driving downhill from a private driveway onto a public road. Due to limited visibility caused by a mailbox, you didn’t see an approaching vehicle and ended up colliding with a Porsche Cayenne. Fortunately, no one was injured, but the vehicle sustained significant damage—front bumper, headlights, airbags deployed, and possibly suspension damage. The police were called, and a report was filed, confirming you as the at-fault driver.
Your Insurance Coverage
As an international student on an F-1 visa, you hold liability-only coverage through AAA with a property damage liability limit of $50,000. This coverage typically pays for damages you cause to others’ property but does not cover damages to your own vehicle.
Key Questions and Risks
1. Will the Other Driver’s Insurance Cover Costs Beyond $50,000?
In California, auto insurance companies pay damages up to the policy limit. If the repair or replacement costs of the Porsche exceed your liability limit, their insurer might seek to recover the remaining amount directly from you. This is known as “subrogation,” and it means the insurance company can pursue legal action to recover the excess.
2. What Happens if They Sue and Win a Judgment?
If the damages surpass your liability coverage and the other party sues you successfully, they could obtain a court judgment against you for the outstanding amount. Since your current assets are limited—such as your vehicle and modest savings—the scope for collection may be limited.
3. Can They Seize Your Car or Garnish Future Income?
In general, if a judgment is awarded and you have limited assets, the creditor might attempt to seize your vehicle or garnish your future wages. However, the extent of their ability to do so depends on local laws and the value of your assets. For someone with minimal assets, collections could be challenging.
4. Are You “Judgment Proof”?
The term “judgment proof” refers to someone who has minimal assets and income that can be targeted in legal collections. If your assets are limited
