Author Topic: Anyone ever been sued for liability that exceeded your insurance coverage?  (Read 11586 times)

Gone Fishing

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I'm considering bumping up my deductibles to the max, and for a fleeting moment considered upping my liability coverage with the savings.  Then I thought about it for moment and I couldn't think of anyone I knew or knew of that had been sued for general liability associated accidents, ect.  associated with owning real estate or driving a car.  Sure, I have heard crazy stories like thieves suing a homeowner because of a dimly lit stairwell they fell down and the drunk drivers who kill someone certainly have wrongful death suits brought against them if they are from means, but never a case of underinsured damages for a normal Joe.  Of course, people usually don't go around televising that they are being sued, so I thought I would poll the audience and see what the collective had to offer in the way of anecdotal information on the subject.   
« Last Edit: February 25, 2016, 08:27:18 AM by So Close »

Giro

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Re: Anyone ever been sued for liability?
« Reply #1 on: February 24, 2016, 12:15:23 PM »
I was sued as the owner of a rental property when a tenant's dog bit a child.  The insurance company settled and paid the victim a small amount.  I didn't have to pay out-of-pocket other than future increases in rates.


Cromacster

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Re: Anyone ever been sued for liability?
« Reply #2 on: February 24, 2016, 12:15:40 PM »
I've never had any personal experience being sued, but I'm sure some of the lawyers on here would have something to say.

A friend of mines father is a lawyer and once represented someone who was being sued because they tripped and fell on a person causing some injuries.  I don't remember the result of the case, but the whole thing seemed pretty silly.
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merula

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Re: Anyone ever been sued for liability?
« Reply #3 on: February 24, 2016, 12:47:44 PM »
I'm an insurance underwriter, specializing in general liability and umbrella coverage. (But for commercial insurance, not personal, it should be noted.)

I don't carry an umbrella. I carry a $300,000 liability limit on both my auto and homeowners. I feel like this is a reasonable amount given my exposures. I don't own things that are likely to cause high liability claims: trampolines, swimming pools, guns, motorcycles. I don't have a teenage driver. I don't have a ton of assets to protect.

In general, higher limits make insurance companies more money. When a coverage makes insurance companies a lot of money, it's probably not worth buying unless you know that your risk is higher than the insurance company thinks it is.

So, should your liability limit be $50,000? No, that's too low. Do you need to carry a $5M umbrella because you heard a horror story where someone slipped on a sidewalk, became paralyzed and the homeowner was sued for failing to prevent it? Probably not.

RedefinedHappiness

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Re: Anyone ever been sued for liability?
« Reply #4 on: February 24, 2016, 12:51:25 PM »
I was sued as the owner of a rental property when a tenant's dog bit a child.  The insurance company settled and paid the victim a small amount.  I didn't have to pay out-of-pocket other than future increases in rates.

Probably an obvious answer...what type of insurance covered you?

marty998

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Re: Anyone ever been sued for liability?
« Reply #5 on: February 24, 2016, 01:13:25 PM »
I was sued as the owner of a rental property when a tenant's dog bit a child.  The insurance company settled and paid the victim a small amount.  I didn't have to pay out-of-pocket other than future increases in rates.

Probably an obvious answer...what type of insurance covered you?

And why does your court system even allow this? Surely it is the responsibility of the owner of the dog?

ZiziPB

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Re: Anyone ever been sued for liability?
« Reply #6 on: February 24, 2016, 01:40:16 PM »
I was sued as the owner of a rental property when a tenant's dog bit a child.  The insurance company settled and paid the victim a small amount.  I didn't have to pay out-of-pocket other than future increases in rates.

Probably an obvious answer...what type of insurance covered you?

And why does your court system even allow this? Surely it is the responsibility of the owner of the dog?

Haha, welcome to the USA :-)

As to OP's question, I got sued once in connection with a minor car accident.  The insurance company ended up paying the plaintiff $10K.



Fishindude

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Re: Anyone ever been sued for liability?
« Reply #7 on: February 24, 2016, 01:59:12 PM »
I carry a $2 mil umbrella. It's pretty cheap. 

StacheInAFlash

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Re: Anyone ever been sued for liability?
« Reply #8 on: February 24, 2016, 02:05:11 PM »
Two personal examples:
1)
Some years ago, I was involved in a highway crash during a cross-country trip a long ways from home. Nobody in either vehicle had any injuries, and while my vehicle was totaled, his large commercial vehicle was barely damaged. He was quite pleasant at the time, joking as we waited for the cops, and I didn't think anything of it. So, imagine the gut wrenching feeling I had when two or three years later, I get a random lawsuit in the mail. As I soon learned, the statute of limitations was going to be up in a matter of weeks before they filed the suit. The suit was pure bullshit. Claimed he couldn't work, etc. Also got sued by his piece of shit wife who claimed loss of company, or something like that--basically a legal maneuver for them to double the lawsuit by saying the wife (who was not in the accident at all) is being hurt by my actions. Utter bullshit. Unfortunately, at the time, I had a $50k limit, and I was now being sued by two parties each seeking damages "in excess of $50,000". I honestly don't know if that excess of $50k is just a legal thing that puts it in a different court or something like that, or if that number was tied to the fact that my insurance limit was $50k. Anyways, I was mortified that my limit had been so low at the time and I was scared I was going to be on the hook for hundreds of thousands of dollars. So what happened: it slowly got drug out (as all lawsuits do I think) over the course of 2+ years. My insurance company provided the lawyer, who I talked to a couple times on the phone, including a taped deposition. I also filled out some papers describing exactly what happened. Thankfully, I never had to travel to the state in which I was being sued (and my lawyer was based).

Eventually, I got a phone call from the lawyer saying the insurance company settled for $30k total. Quite frankly, I wanted to counter-sue for the pain and suffering I legitimately had during those two years of fear and unknown. It was just a lump in my stomach, something I couldn't shake, keeping me awake at night. But of course, what I wanted even more was to never be part of a lawsuit ever again.

Moral of the story: Your car insurance company should have your back if you're sued, and your limits will probably cover it if they get a settlement, but then again, maybe not. If I had caused actual serious medical issues, he would have been in his right to sue me for a lot more and it wouldn't look so frivolous anymore, and he could have possibly (and rightfully) gotten way more than my insurance would pay out. Since that time, I've always kept my car insurance at a $250k/$500k limit, and I carry a $1 million umbrella. If I got sued for something frivolous again, would they get more than $30k out my insurance company since I have such high limits? Maybe, but I don't really care as long as it is under my limit. The savings of cheap, low insurance went right out the fucking window the moment I was sued by the high cost of living with fear of losing everything. While I'm sure I would have still had some restless nights had my insurance limits been maxed, I doubt it would have been the same in this particular example.

2)
A few winters back, I slipped on some ice on a sidewalk in front of a person's house. Goofed up my knee in the process of falling. MRI, lots of PT, and lots of medical bills that my health insurance company had to pay. Sometime during this process, I get a letter from my health insurance company asking for details about where exactly I fell, whose house I was in front of!, and how it happened. To me, it seemed they wanted to know if they could somehow recover damages from the person whose house I was in front of who should have kept the ice clear from the sidewalk. The form never said anything specifically about that, but that is how I interpreted it. Now, technically the homeowner was at fault because I did slip on ice in front of their sidewalk, but my God!, it was my own dumb fault for falling. I was definitely not thinking of a lawsuit at all (although in a different,  uninsured world, I can see how maybe I would think it....MRIs aren't cheap, people), so in the form I said I couldn't quite remember where exactly it was, which wasn't untrue. It was right around the property line between two houses, and when I fell and recovered I wasn't concerned about where exactly I was in relation to an unmarked property line. Thankfully, I never received another form or other followup about it. Had I put down an address though, who knows what would have happened...probably nothing, but maybe not. This experience did not change how I handle my insurance, but again, I already had the umbrella policy in place.

We (in the US) live in a litigious society. I try to do my part on both fronts by covering my ass with insurance and also taking personal responsibility for my own actions.

 

« Last Edit: February 24, 2016, 02:07:49 PM by StacheInAFlash »

KCM5

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Re: Anyone ever been sued for liability?
« Reply #9 on: February 24, 2016, 03:29:25 PM »
My parents were, twice that I know of. Teenage drivers (one of them being me), fender benders, and apparently the appearance that they were a desirable target to sue.

Their insurance company settled for them, but I do know they definitely held umbrella insurance until we were all fully out of the house/on our own insurances.

mtn

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Re: Anyone ever been sued for liability?
« Reply #10 on: February 24, 2016, 03:52:28 PM »
I think this may be an ongoing case, so I'm going to keep everything very vague.

I was an... indirect participant in a sporting event. A door to the area of play was not closed after all direct participants entered the area of play. There are no specific guidelines or rules as to who closes that door, only that it should be closed during play. This incident occurred during warmups. An object was propelled out of the area of play, during warmups, through the open door, and struck a person who was admittedly pretty badly injured.

She (or her health insurance) sued:
The school hosting this event between 2 other schools
The 2 schools playing in this game 
The venue that this was held at (not affiliated with any of the schools)
The city that owns the venue

I was brought in for a deposition. I was not sued, nor was the organization that sanctioned the event (which I am indirectly affiliated with) or the organization that works with THAT organization (that I am directly affiliated with). However, I know for a fact that the organization was at risk of it, and I assume that they were talking about suing myself and the other 2 indirect affiliates. Ever since then, I have carried an Umbrella policy. Will it ever be worth it? I honestly hope not. But it is about $35 a year on top of my auto and rental. It isn't much. I'll take it.

(Note, I also work in Risk and in the past worked in Insurance)

Cassie

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Re: Anyone ever been sued for liability?
« Reply #11 on: February 24, 2016, 04:38:00 PM »
When I fell and broke my wrist my health insurance wanted to know where i fell too. I didn't tell them because i think it is bullshit to go after the owner and there wasn't any ice. I just didn't pick my foot up high enough.

arebelspy

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Re: Anyone ever been sued for liability?
« Reply #12 on: February 24, 2016, 04:43:02 PM »
Following.

No comment, for now.
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electriceagle

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Re: Anyone ever been sued for liability?
« Reply #13 on: February 24, 2016, 04:54:51 PM »
Insurance is for low-frequency, hard to predict, high impact events. From the posts above, it sounds like liability due to personal injury fits that description.

Increases in liability coverage on homeowners, auto and umbrella policies are usually pretty cheap.

human

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Re: Anyone ever been sued for liability?
« Reply #14 on: February 24, 2016, 05:33:26 PM »
I've always thought the minimum for liability on car insurance should be 1 million (by that I mean to say mandated by law). I think in Ontario you can have 200K. 50k liability seems so low to me especially in the US, I would think you'd want ten million!

Goldielocks

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Re: Anyone ever been sued for liability?
« Reply #15 on: February 24, 2016, 08:18:39 PM »
Our homeowners insurance has umbrella liability attached to it.

My son (age 11 at the time) rode his bike headfirst into a parked car.   
Rolled his bike over the hood scratching the XF*SKDF out of it.  Nice Acura, too.

We knocked on the door, after patching him up, provided our insurance information, and were covered 100%.  Our deductible did not apply to liability claims, nothing out of pocket.

Not "sued" technically, but "Sue" is just the term / process used for making claims and receiving $$'s in many of these cases.

I am trying to figure out how often people try to sue for over $500k or $1million, when the insurance maxes out at $500k or $1million -- I have not yet heard of anyone being personally sued in excess of that sort of limit... have you?   

horsepoor

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Re: Anyone ever been sued for liability?
« Reply #16 on: February 24, 2016, 08:56:33 PM »
Don't know the outcome yet, but someone I know was being sued because their irrigation water supposedly caused their neighbor who has a right ofway for their driveway to slip in the mud.  Don't know why you'd move to the country and expect to never encounter mud, but there you go.  The plaintiff in this case apparently has a history of getting huneeds of thousands from settlement in a similar  suit before moving to this location.  Hoping the case was thrown out, but plenty stressful for my friend.

flyingaway

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Re: Anyone ever been sued for liability?
« Reply #17 on: February 24, 2016, 09:13:00 PM »
I know a medical student who injured someone in a car accident. The injured person did not sue him because he had no money at that time. Several years later, he was working as a doctor in Washington State and was sued by that injured person. I do not know the amount.

I think when you do not have much money, you may get away with low liability insurance. However, when you have FU money r FIREd, you really need liability insurance and umbrella insurance.

Papa bear

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Re: Anyone ever been sued for liability?
« Reply #18 on: February 24, 2016, 11:25:20 PM »
Yes.  Car accident. With multiple vehicles and minor injuries. Multiple parties sued, dragging it out over 3 years.  One minor hand injury was settled out for close to 100k (medical bills and a lost academic sports season). I had 100/300 at the time. Other parties all settled for well under limit.

Family has been sued on rental properties, always settled out of court through insurance.

Now i carry 300/500 and 1mm umbrella and thinking of raising that to 2. 



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Cromacster

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Re: Anyone ever been sued for liability?
« Reply #19 on: February 25, 2016, 06:32:05 AM »
I think when you do not have much money, you may get away with low liability insurance. However, when you have FU money r FIREd, you really need liability insurance and umbrella insurance.

A good reason to utilize IRA's and other employer sponsored retirement plans, which are largely protected in lawsuits and bankruptcy.
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merula

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Re: Anyone ever been sued for liability?
« Reply #20 on: February 25, 2016, 07:49:42 AM »
I think when you do not have much money, you may get away with low liability insurance. However, when you have FU money r FIREd, you really need liability insurance and umbrella insurance.

A good reason to utilize IRA's and other employer sponsored retirement plans, which are largely protected in lawsuits and bankruptcy.

What is protected from creditors depends heavily on where you are. Employee-sponsored plans like 401(k)s are protected by federal law (ERISA), while the protection for IRAs depends on a bunch of other factors. Whether and to what extent your home is protected is also a matter of location. Plus, you may need to declare bankruptcy to actually get this protection.

cheddarpie

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Re: Anyone ever been sued for liability?
« Reply #21 on: February 25, 2016, 07:51:27 AM »
My neighbor threatened to sue me because my tenant was smoking as she walked down the public street in front of the neighbor's house -- he said she could have caught his dry grass on fire had she dropped her cigarette (she didn't). He is a nut job, but that's what insurance is for. There are a lot of those out there. It is not rational.

Dezrah

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Re: Anyone ever been sued for liability?
« Reply #22 on: February 25, 2016, 08:20:40 AM »
I have a tangentially-related anecdote:

A relative is sued for some traffic-accident related.  The insurance company sends a letter notifying her she is being sued and heavily imply it may be in her best interest to have her own independent attorney take a look at it.  "Well what the heck is insurance for?  Aren't they supposed to protect me?" she thinks.  She shows it to a friend who is a failed-lawyer (by choice, not ability) but successful philosophy professor. 

He tells her that the insurance company is currently under legal obligation to represent her to the best of their ability or risk a malpractice suit if they slack off.  As soon as she takes the letter to attorney, however, she has formerly contracted the services of a third party and the company is no longer under strict duty to see the case through. 

His advice to her was to write a response letter along the lines of "I have complete confidence in your abilities.  If, however, you do not feel up to the task... etc."  Of course the insurance attorney writes back, "Oh no, we'll take good care of you.  We weren't implying anything like that."  Skeeves me out.

So either get your insurance and use it or be willing to hire a great defense attorney, but don't do both.

The exact nature of this law might vary among states, so just be generally cynical and suspicious of everyone and you'll be fine :P

NoStacheOhio

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Re: Anyone ever been sued for liability?
« Reply #23 on: February 25, 2016, 08:33:55 AM »
I was sued as the owner of a rental property when a tenant's dog bit a child.  The insurance company settled and paid the victim a small amount.  I didn't have to pay out-of-pocket other than future increases in rates.

Probably an obvious answer...what type of insurance covered you?

And why does your court system even allow this? Surely it is the responsibility of the owner of the dog?

It's pretty standard to go after anyone who might be even tangentially involved in whatever occurred. It's legal, and happens all the time. I lost a traffic-related suit because someone changed lanes into me, then crossed into opposing traffic. They argued I was at fault because I didn't let the first person over (mind you, I didn't see a turn-signal, and had the right of way). The actual law also matters a lot less than it should it a court of law.
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caracarn

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Re: Anyone ever been sued for liability?
« Reply #24 on: February 25, 2016, 08:38:46 AM »
I was sued as the owner of a rental property when a tenant's dog bit a child.  The insurance company settled and paid the victim a small amount.  I didn't have to pay out-of-pocket other than future increases in rates.

Probably an obvious answer...what type of insurance covered you?

And why does your court system even allow this? Surely it is the responsibility of the owner of the dog?

I thought umbrella policies were not needed until I went through 3 years of hell.  Let me explain the situation if you feel our US court system will give you "justice".

Due to a divorce right after I relocated for a job to another state, I decided to sell the house we had just bought because I could no longer afford it after the financial changes from the divorce (alimony, much high child care because my three kids were with me 80% of the time now as a single parent).  The house was built in the 70s so was not newer.  Six weeks after we moved in we had a hot water supply line pop out of the compression fitting under a sink in the finished basement.  Resulted in 3 inches of water in the entire basement by the time it was discovered.  We filed an insurance claim and resulted in $40K of repairs.  A few weeks later we had some staining on our dining room roof and worked with a roofer to have them reshingle the section as they felt it was caused by an ice dam and new ice guard etc. should improve.  They obviously could not guarantee it would not leak again but told us to monitor.  Obviously to do that I needed to paint the areas of the ceiling that had been stained.

When I sold the house, I included all this on the disclosure and provided documents from my insurance company, the company who dried the basement out, all the contracting documents on what was repaired and all the info from the roofer.  I was told during the lawsuit by my attorneys that since these items were repaired and not pending I was not even required to disclose them so I had gone above and beyond even making them aware.  They had a home inspection.  Everything was as you would expect in a sale of a house and I even provided them with the inspection I had had done when I had bought the house just a year before, again, nothing I was required to do.

About a year after I had sold the house I was sent a letter from a law firm indicating the new home owners had had roof leaks and some other issues and they wanted me to contact their office.  Consulting an attorney I was told to ignore the letter as they had no grounds etc.  Six months later the new homeowners sued be claiming fraud on the disclosure form.  They wanted $100K in damages, plus legal fees punitive damages for pain and suffering and other things totaling seven different ways they wanted money.  This is when my lessons in the American legal system began.

I retained a law firm and after the initial review they said this should be pretty simple because I had disclosed all I know, had given them more than was needed, some of which pointed them right to areas that had been repaired and that their inspector had looked at etc.  (at one of the briefs my attorney had used the phrase "provided a blueprint on exactly where to look if you believed there was a problem") In short no way that things were not disclosed.  I explained my financial situation after the divorce and that I could not afford any high legal bills and they assured me that it would at most be $10 - $20K as they saw it but obviously could not guarantee anything.  I will be clear that at the end of this I still think the team I had did they best they could with our messed up system.

We got granted a motion of summary judgement in our favor.  They then turned around an appealed. When they lost that they turned around and appealed to the State Supreme Court.  From start to finish the whole process took almost 3 years.  In the end my legal bills were over $60K and not once did we ever step foot in a court room.  This was all just filing briefs and responses and all this other crap.  I found out that the burden of proof to counter sue for a frivolous lawsuit is very high and that I would probably through another $10K away if I tried that so in the end my attorney's and I decided not to go down that path.  During the process I am having family and friends yelling at me that there is no way the court system would even allow this as we had done everything by the book and the buyers were able to inspect and had visited the property multiple times and we had disclosed.  Things I had done to help fix my home like repainting were attempted to be used as evidence that I covered things up.  General clauses in contracts like the roofer's language that there could still be a leak after a roof repair (obviously a clause printed there to help them avoid legal trouble) was attempted to be used to indicate that there could have been a leak and somehow I was supposed to know that even though I saw no evidence to indicate there was.  I would have been better off not re shingling the roof because that contract would not have been there.  In the end we "won" but I was dragged along by a system that makes a defendant spend gobs of money to prove that nothing happened.  I get this was not a criminal trial, but a civil one, but that feeling of "innocent until proven guilty" was not there in any way as the bills kept coming each month for $3K one month then $5K the next, all the while with the apologies that they were doing everything they could to keep costs down (which I believe they were) but that they still needed to defend me because if you do not respond to suits or briefs the system automatically finds for the plaintiffs.  So how is that "innocent until proven guilty".  If we just responded and said we did not do it, and they could not prove that I did anything we would have lost because the system is rigged to require a defense.  I could have put that money to use on my family or helping my kids through college.  Instead it is gone because caveat emptor clauses in purchase agreements and such can be ignored by a legal system as they drag you through $60K of paperwork. 

When I finally did get my umbrella policy after this one of the prime drivers was that I was told I could certainly have filed a claim for that money and since I was found not at fault it would certainly have been covered.  (If you are sued and found guilty of fraud then the umbrella policy will not cover, which makes sense).  I follow the rules and am very honest and forthright and even with that I was sued by people who seemed educated and good as well when I met them in depositions.  My firm could only speculate that the other firm had to be taking the case on contingency (i.e. being ambulance chasers) because the plaintiff cost in this case is usually about 3 times higher than the defense, so their costs would have approached $200K.  If it was not contingency, they may have been getting fed the line that cost did not matter because when they won I'd be paying it anyway.  If that was the case, I really feel sorry for them.  Of course we could not talk to each other directly once the case started so I will never know what they were being told by their attorney or what they believed. 

In reality who they should have possibly sued was their inspector who may have missed signs of an aging home that needed some repairs that could cause issues (they did ignore things like covering window wells that their inspector had found and then also tried to blame me for them.  We discovered this as we received their documents as part of the case).  So similar to your question is it not the fault of the owner of the dog?  While our court system agrees with you (as they ultimately did with us that we disclosed more than what was needed and the buyer's had ample chances to discover issues) do not lose sight of the fact that it cost you $100K just to get to the point where the party that is suing you understands that they now need to go sue the owner of the dog. 

What I learned, is that a $300 a year policy could have covered me for a $60K cost.  Even if I keep that policy for 100 years I would make money on it in that case.  Get liability coverage.  As others have said, in our litigious society when it can never actual be the fault of themselves, people will always be looking for someone to blame.  I would have never thought they would blame me.  I was a fool.

caracarn

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Re: Anyone ever been sued for liability?
« Reply #25 on: February 25, 2016, 08:41:00 AM »
I was sued as the owner of a rental property when a tenant's dog bit a child.  The insurance company settled and paid the victim a small amount.  I didn't have to pay out-of-pocket other than future increases in rates.

Probably an obvious answer...what type of insurance covered you?

And why does your court system even allow this? Surely it is the responsibility of the owner of the dog?

It's pretty standard to go after anyone who might be even tangentially involved in whatever occurred. It's legal, and happens all the time. I lost a traffic-related suit because someone changed lanes into me, then crossed into opposing traffic. They argued I was at fault because I didn't let the first person over (mind you, I didn't see a turn-signal, and had the right of way). The actual law also matters a lot less than it should it a court of law.

Totally accurate.  See my story up above.

celticmyst08

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #26 on: February 25, 2016, 10:01:35 AM »
This is good timing because I recently finished a business law class and after all the talk of liability it made me paranoid about the low liability coverage I have for my auto insurance. ($25k/$50k I believe). I've been wondering how much car insurance I should have. I consider myself a responsible driver but obviously that won't 100% prevent accidents. I'm actually more worried about the other driver not being properly insured...

What I learned, is that a $300 a year policy could have covered me for a $60K cost.  Even if I keep that policy for 100 years I would make money on it in that case.  Get liability coverage.  As others have said, in our litigious society when it can never actual be the fault of themselves, people will always be looking for someone to blame.  I would have never thought they would blame me.  I was a fool.
Holy, what a story. Really unfortunate.

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« Last Edit: February 25, 2016, 10:05:07 AM by celticmyst08 »
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TheInsuranceMan

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #27 on: February 25, 2016, 10:58:02 AM »
This is good timing because I recently finished a business law class and after all the talk of liability it made me paranoid about the low liability coverage I have for my auto insurance. ($25k/$50k I believe). I've been wondering how much car insurance I should have. I consider myself a responsible driver but obviously that won't 100% prevent accidents. I'm actually more worried about the other driver not being properly insured...

What I learned, is that a $300 a year policy could have covered me for a $60K cost.  Even if I keep that policy for 100 years I would make money on it in that case.  Get liability coverage.  As others have said, in our litigious society when it can never actual be the fault of themselves, people will always be looking for someone to blame.  I would have never thought they would blame me.  I was a fool.
Holy, what a story. Really unfortunate.

(Side note: is your username a WoT reference?)

25/50 is NO sufficient!  100/300 minimum.

celticmyst08

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #28 on: February 25, 2016, 11:43:18 AM »
25/50 is NO sufficient!  100/300 minimum.
Yeah, that's what I set up when I first got my own insurance a few years back. Being frugal of course I went with the cheapest coverage, but now that I know more I definitely need to increase it.
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merula

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Re: Anyone ever been sued for liability?
« Reply #29 on: February 25, 2016, 12:02:41 PM »
caracarn, I'm really sorry that happened to you, but I'm confused as to how an umbrella policy would have helped. If this was an insured loss, it would have been completely covered by your homeowners policy as there were no damages and defense costs aren't part of a typical homeowners limit. (Meaning that the insurance carrier pays for the legal costs of defending a covered claim, but those costs don't factor into your limit.) If this was not an insured loss under your homeowner's policy, it almost certainly wouldn't have been covered by an umbrella.

Beaker

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #30 on: February 25, 2016, 12:21:09 PM »
Following.

(giant house-selling shitstorm)

Ye gads, what a mess! My sympathies. I've believed that you should disclose everything when selling, but that almost convinces me it's better to pretend to be extremely unobservant.

AlwaysLearningToSave

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Re: Anyone ever been sued for liability?
« Reply #31 on: February 25, 2016, 12:25:10 PM »
I think when you do not have much money, you may get away with low liability insurance. However, when you have FU money r FIREd, you really need liability insurance and umbrella insurance.

A good reason to utilize IRA's and other employer sponsored retirement plans, which are largely protected in lawsuits and bankruptcy.

What is protected from creditors depends heavily on where you are. Employee-sponsored plans like 401(k)s are protected by federal law (ERISA), while the protection for IRAs depends on a bunch of other factors. Whether and to what extent your home is protected is also a matter of location. Plus, you may need to declare bankruptcy to actually get this protection.

+1.  This is a big advantage of retirement accounts, especially employer-sponsored plans.  Assets in a qualified retirement plan are exempt from the bankruptcy estate (and therefore out of creditors' reach), with no upper limit on the value.  IRA's are similarly protected but only up to a limit of about $1.2 million.  State laws protecting IRAs from creditors claims (not sure how complete/accurate this is):  http://moranknobel.com/news/State_Laws_Protecting_IRAs.pdf  Explanation of bankruptcy protection for qualified plans and IRAs:  http://employeebenefitsblog.boselaw.com/2014/06/25/bankruptcy-protection-for-iras-and-erisa-plans/

A practical reality that works to a defendant's benefit is that plaintiff's attorneys may initially demand more than the policy limits but then be willing to settle the case if the insurer pays out its policy limits.  The time and hassle of pursuing an individual's assets isn't worth it if there is a good-sized check from the insurance company.  This is especially true if the lawyer is working on a contingency-fee basis. 

For most people, if you carry reasonable homeowners and auto policies and a small umbrella policy, you are good to go.  If someone ever actually gets a judgment against you for more than the amount of your liability limits, you will be considering all options including bankruptcy protection.  But how likely is it that will occur? 

The calculus changes for business owners and people with more wealth than the average early retiree.  If most of your assets are in taxable accounts, real estate, etc., creditors will be able to reach most of your assets.  In this case it may make sense to have higher policy limits. 

I'm actually more worried about the other driver not being properly insured...

I think people often overlook the importance of uninsured/underinsured motorist coverage.  This is your way of making sure that if you are injured by a driver that does not have insurance, you can still get compensation.  The coverage follows the person, not the vehicle, so if an MMM cyclist gets hit by an unsured driver, the coverage still applies. 
« Last Edit: February 25, 2016, 12:28:53 PM by AlwaysLearningToSave »

TrMama

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Re: Anyone ever been sued for liability?
« Reply #32 on: February 25, 2016, 12:35:07 PM »
I think when you do not have much money, you may get away with low liability insurance. However, when you have FU money r FIREd, you really need liability insurance and umbrella insurance.

This is exactly the reason we carry the maximum amount of liability on our home and car insurance. Not only do we have FU money, our home address is on "Fancy Subdivision Lane". People assume we have piles of cash simply based on our address. Obviously, we shouldn't have bought this house, but paying a few dollars extra for insurance is a heck of a lot cheaper than moving.

DH is being sued, in the 6 figures, for a minor car accident. The suit is an obvious nuisance claim, but I'm so, so glad we have sufficient liability coverage. It's absolutely worth all the nights I've been able to sleep over the past 2 years.

ShortInSeattle

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #33 on: February 25, 2016, 01:19:44 PM »
My elderly FIL was sued by a woman who walked into the side mirror of his car and bumped her elbow. (he was travelling at about 5 MPH in a parking lot and she stepped out from between two parked cars as he was passing) When she lost she appealed. His insurance company defended both suits, did the research to prove she had pulled stunts like this before, and he never paid a cent in legal fees or needed to show up in court.

My understanding is that one of the best reasons to have a good liability policy is that by extension you tend to get good legal representation. When an insurance company could be out "big bucks" they'll defend themselves, and by extension that means defending you.

We have a 2M umbrella and fairly high auto liability coverage. Our home itself doesn't have many hazards (we have no yard, or sidewalks, etc) but one bad car accident can happen to anyone and medical costs can be sky-high for those impacted. Auto risk is our main reason for our high limit. We chose our limit because it is higher than our net worth, even though that's not 100% protection - there is nothing to stop someone from suing you for 100 million so at some point you just need to figure out how big a suit you want to protect against.

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caracarn

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Re: Anyone ever been sued for liability?
« Reply #34 on: February 25, 2016, 01:22:59 PM »
caracarn, I'm really sorry that happened to you, but I'm confused as to how an umbrella policy would have helped. If this was an insured loss, it would have been completely covered by your homeowners policy as there were no damages and defense costs aren't part of a typical homeowners limit. (Meaning that the insurance carrier pays for the legal costs of defending a covered claim, but those costs don't factor into your limit.) If this was not an insured loss under your homeowner's policy, it almost certainly wouldn't have been covered by an umbrella.

It was explained that the policy could have been used to pay the legal fees.  It was in no way covered by homeowners because it was not damage to MY home.  This was someone suing me for a home I sold and later damage that occurred under their watch.

caracarn

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #35 on: February 25, 2016, 01:25:00 PM »
Following.

(giant house-selling shitstorm)

Ye gads, what a mess! My sympathies. I've believed that you should disclose everything when selling, but that almost convinces me it's better to pretend to be extremely unobservant.

No, I think I just got really poor luck.  The disclosing actually is what helped as my defense group was able to prove that they did not rely solely on anything from me and that was was provided from me was more than adequate for anyone to find anything they felt was wrong. 

Paul der Krake

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #36 on: February 25, 2016, 01:54:27 PM »
Somebody please explain what is stopping me from just walking down my street with my eyes closed after a snow day until I inevitably slip and fall in front of someone's house.

bobechs

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #37 on: February 25, 2016, 02:04:47 PM »
Somebody please explain what is stopping me from just walking down my street with my eyes closed after a snow day until I inevitably slip and fall in front of someone's house.

Nice downhill run into hurting yourself; long uphill slog getting paid for it, legit or not.

Don't believe that?  Okay: go for it, you moron.

[MOD NOTE: Forum Rule #1.]
« Last Edit: February 25, 2016, 02:09:30 PM by arebelspy »

Beaker

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #38 on: February 25, 2016, 02:41:09 PM »
Somebody please explain what is stopping me from just walking down my street with my eyes closed after a snow day until I inevitably slip and fall in front of someone's house.

Pretty sure there are people who make a hobby, or even a "profession," of that. Except I think that they tend to just claim to have fallen, rather than actually doing it. It's just a job after all - not worth breaking your neck over.

What's stopping you... ethics? Basic human decency? The Flying Spaghetti Monster?

merula

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Re: Anyone ever been sued for liability?
« Reply #39 on: February 25, 2016, 03:02:05 PM »
caracarn, I'm really sorry that happened to you, but I'm confused as to how an umbrella policy would have helped. If this was an insured loss, it would have been completely covered by your homeowners policy as there were no damages and defense costs aren't part of a typical homeowners limit. (Meaning that the insurance carrier pays for the legal costs of defending a covered claim, but those costs don't factor into your limit.) If this was not an insured loss under your homeowner's policy, it almost certainly wouldn't have been covered by an umbrella.

It was explained that the policy could have been used to pay the legal fees.  It was in no way covered by homeowners because it was not damage to MY home.  This was someone suing me for a home I sold and later damage that occurred under their watch.

A typical homeowners policy has a property coverage section and a liability coverage section. The property coverage is for damage to the insured property, like you said. The liability coverage IS NOT limited to your home or your liability as a homeowner. It covers your liability as defined by the policy.

As an example, here's roughly what my personal insurance policy says: (minor details have been changes to not identify the insurance company; what's below is industry standard)

We will pay those sums the insured becomes legally obligated to pay as damages because of bodily injury, personal injury or property damage to which this insurance applies.

This could be your liability for a slip and fall inside or outside your home, your dog biting someone at the dog park, serving a friend alcohol and letting them drive, or any number of other things.

It's possible that your homeowners policy has an exclusion for whatever happened. If that's the case, and you buy your umbrella through the same carrier, in all likelihood they've written the same exclusion into the umbrella. The intent of an umbrella is not to pick up claims first but to provide extra limit.

And there is not any personal liability policy I've ever heard of that would pay legal fees in the absence of a covered claim.

Paul der Krake

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #40 on: February 25, 2016, 03:08:28 PM »
Okay, let me rephrase. What are the safeguards or doctrines of tort law that prevent egregious abuse? I assume the defense typically has a playbook filled with checklists to try throw the case out or diminish the liability.

If there aren't any, why are criminals still gunning people down over $100 when they could just go fishing for insurance money?

bobechs

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #41 on: February 25, 2016, 03:11:44 PM »
Somebody please explain what is stopping me from just walking down my street with my eyes closed after a snow day until I inevitably slip and fall in front of someone's house.

Pretty sure there are people who make a hobby, or even a "profession," of that. Except I think that they tend to just claim to have fallen, rather than actually doing it. It's just a job after all - not worth breaking your neck over.

What's stopping you... ethics? Basic human decency? The Flying Spaghetti Monster?

... It won't work?

What makes you "pretty sure"  that it does work, either at the hobby or pro level?

Ever tried to extract some bucks from an insurance company or the like with a slip and fall claim?

Ever tried to do the same, more than once?

They have these things called 'databases'...  They also require documented proof of these things called 'damages'...  And they fight like uhmmm...heck... over this thing called 'liability.'

In other words, they don't need other people to be super-ethical to do just fine for themselves in this fallen world.


merula

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #42 on: February 25, 2016, 03:13:01 PM »
Okay, let me rephrase. What are the safeguards or doctrines of tort law that prevent egregious abuse? I assume the defense typically has a playbook filled with checklists to try throw the case out or diminish the liability.

If there aren't any, why are criminals still gunning people down over $100 when they could just go fishing for insurance money?

Short answer is nothing. There's no way to prevent nuisance suits without preventing some legitimate ones, and the people who are in charge of these kinds of things are lawyers who, as a group, get paid more for more lawsuits.

Why do criminals gun down people over $100 when there are better rackets? Maybe because addiction can't wait for a court date?

Cathy

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #43 on: February 25, 2016, 03:34:12 PM »
Okay, let me rephrase. What are the safeguards or doctrines of tort law that prevent egregious abuse? ...

Let's take a step back and revisit the most basic principle of suing anybody for anything: If you want to recover damages against somebody, it's not enough that you have suffered damages; you also need to state a claim known to law, prove the claim, and prove that the damages are recoverable relative to the claim. Although user "bobechs" was a bit oblique in his wording, I believe this was the point that he was trying to convey too.

The law itself is different in every jurisdiction so any analysis of the various fact patterns posted in this thread will also be jurisdiction-dependent.

If somebody files a claim against you that has no basis in law, the law of the relevant jurisdiction probably provides some mechanism to resolve the case quickly and to apply for sanctions against the person who brought the case. If the person bringing a case with no basis in law is represented by a lawyer, it is probably also possible to file a complaint with the entity governing lawyers in the jurisdiction. Codes of professional practice typically prohibit lawyers from bringing claims with no basis in law. See, e.g., ABA Model Rule 3.1 ("A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous ...").

Note: I express no view on any legal issues stemming from any of the scenarios posted in this thread.
« Last Edit: February 25, 2016, 03:41:59 PM by Cathy »
This post contains only general information on the issues raised by this topic. This post does not provide help tailored to your specific situation. There are many facts that could be relevant to your specific situation and I am not in possession of those facts. If you need help tailored to your specific situation, you should retain an appropriate professional and not rely on this post.

NoStacheOhio

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Re: Anyone ever been sued for liability?
« Reply #44 on: February 26, 2016, 05:24:16 AM »
... The coverage follows the person, not the vehicle, so if an MMM cyclist gets hit by an unsured driver, the coverage still applies.

Sorry to be pedantic, but this depends on where you are.
The first step is acknowledging you have a problem, right?

merula

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Re: Anyone ever been sued for liability?
« Reply #45 on: February 26, 2016, 07:29:22 AM »
... The coverage follows the person, not the vehicle, so if an MMM cyclist gets hit by an unsured driver, the coverage still applies.

Sorry to be pedantic, but this depends on where you are.

And also what kind of coverage you have. You can buy coverage that follows both the person AND the vehicle for permissive users. You can also buy coverage that only follows the vehicle (sometimes, depending on if your state allows it), or coverage that's just for you as a driver, if you don't own a vehicle.

AlwaysLearningToSave

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Re: Anyone ever been sued for liability?
« Reply #46 on: February 26, 2016, 08:18:43 AM »
... The coverage follows the person, not the vehicle, so if an MMM cyclist gets hit by an unsured driver, the coverage still applies.

Sorry to be pedantic, but this depends on where you are.

And also what kind of coverage you have. You can buy coverage that follows both the person AND the vehicle for permissive users. You can also buy coverage that only follows the vehicle (sometimes, depending on if your state allows it), or coverage that's just for you as a driver, if you don't own a vehicle.

Thanks for the caveats.  It is not "pedantic," it is accurate and precise.  I was too hasty with my comment. 

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #47 on: February 26, 2016, 04:31:27 PM »
Lawyer here. I do some contingency fee work and some defense work. My view is that this kind of catastrophic coverage is worth it.

I upped my limits to 250/500 once I graduated from law school and had an income. I probably waited too long to do that since potential plaintiffs will evaluate your future income stream and actual assets when deciding whether to file. If I had a home, I would have good liability coverage too.

The other thing to consider is that your insurance may be the only way someone deserving actually gets a chance to have their medical bills paid. If I was driving a car and injured someone, I would want them to be taken care of. Same thing if my deck collapsed. That contributed to me upping my limits. People can blow through $100k in medical bills in no time.

Most personal injury lawyers (well, the good ones anyway) derive a lot of satisfaction from helping people that have been screwed. We all think we would never hurt someone, but in life, it happens. So good insurance is worth it.

To the above poster re: the housing nightmare: that sucks. That really sucks.

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #48 on: February 26, 2016, 05:38:14 PM »
Never sued but I've used the liability coverage included with my homeowners policy. Long story short, a woman fell and cracked 2 teeth because of my dog. Exact quote from my insurance company after I gave them the woman's info "Well let me look at your coverage... (sees umbrella in addition to 300k of homeowners liability)... Oh you have plenty of coverage, we'll handle everything, no need to worry." And they then took care of EVERYTHING, I never heard another peep. Worth every penny of what I pay.
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Kaydedid

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Re: Anyone ever been sued for liability that exceeded your insurance coverage?
« Reply #49 on: February 26, 2016, 05:38:18 PM »
Had an auto insurance contretemps several years ago.  I was driving an unknown rural highway at twilight, and the driver in front of me made a poor choice (hit the brakes at 70mph instead of running over small animals crossing the road).  I was following too closely, but was able to slow down to about 40 before rear-ending her.  When I ran to see if she was ok, she refused to talk at all (not wrong, but very out of the ordinary for that area), and her passenger immediately started railing about how I broke her back. 
My little Ford focus had some decent crumple damage on the front, while her beater van had one or two scratches. 

A few months later, a letter arrives in the mail that the insurance company is being sued for medical injuries from the accident.  Ok, fine, whiplash happens, MRIs are expensive, they had no insurance of any kind, whatever.  This keeps on for several years-keep getting more and more notices, the amount keeps growing.  Finally, the insurance company informs me that the total amount the lady is suing for is greater than my coverage, and they're dropping my policy as of today (*&%^ you State Farm!), although they will keep on taking care of this claim.

In the end, she ends up getting 2k for medical bills (she had prior back issues that she tried to blame on the accident, as well as lost wages and pain and suffering etc).  Since I have gossipy relatives, come to find out her 'employment' is selling dildos and vibrators through a MLM company.  Apparently, the sex plug industry in middle-of-nowhere Indiana isn't doing so hot, and she had been excitedly telling folks about her 'lucky break' in being hit by some punk kid from Chicago.  Normally not a big fan of insurance companies, but I'm so glad they won this one.