Expert: Ron Cercone - 3/3/2009

Question
My husband got into an accident in May 2008. He t-boned the oncoming car (his fault)and he was neither drunk nor speeding. His insurance paid about $15K for the damages to the car and $20k for medical bills. There were three people in the other car, and now all three are filing suit for damages (one person $60k, one person $20k, and one person $40k). My husbands insurance company stated that they would handle the suit, however I am afraid that if the insurance were to loose, then we would end up having to pay the damages. We just purchased a new home and we have an infant. Can these people still sue us even though my husband's insurance company alreadypaid them for damages? what will happen if the insurance company is unsuccessful in fighting this suit?

Thank you for all your advice.

Sincerely,
Paola

Answer
Hello Paola,

Well, if they lose, then your insurer still has to pay up to your policy limits. Your insurer would not go to court if they did not think the other driver was asking too much. And they have the right to choose the lawyer. You can use a different lawyer, if you want to pay the attorney fees yourself.

Yes, if a court judgment was over your policy limits, then you would owe it. I assume you don't have an umbrella policy. If you had limits on your vehicles of 500 and 500k on liability, and a homeowners policy as well at 300k, you should be able to get a 1 million umbrella policy for $200.00/year. Umbrellas require the high underlying limits, but he extra premium is pretty small from 300 to 500k. Umbrella will run more or less depending on how many underlying policies, vehicles and homes, you want covered by the umbrella.