Author Topic: A question regarding Bodily Injury Liability  (Read 2364 times)

shanesauce

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A question regarding Bodily Injury Liability
« on: January 15, 2016, 09:45:19 PM »
This insurance is not required to drive in the state of Florida and I am currently paying $227 every 6 months for said insurance. Me and my wife are not accident prone by any means but this doesn't mean we won't somehow be at fault in the future.

From the little research I have done this insurance is recommended to basically shield your net worth from a lawsuit, given the fact that we have basically no net worth at this point in my life is it safe to say I can drop this insurance for the time being? I would assume that as you build up your net worth you would want to insure up to that value?

Any help is greatly appreciated.

Cathy

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Re: A question regarding Bodily Injury Liability
« Reply #1 on: January 15, 2016, 10:04:13 PM »
Your post raises many issues and I express no view on most of them.

However, you seem to be confused about one important point, so I reply to this thread to correct that potential misunderstanding.

In general, a court can issue a judgment against a defendant that exceeds the defendant's net worth. Indeed, "compensatory damages ... do not implicate the net worth of the defendant" and will be awarded based on the amount of compensation to which the plaintiff is entitled under the law. Ji v. Bose Corp, 626 F 3d 116, 120 (1st Cir 2010) (quoting an unreported district court order). It is surprisingly difficult to find any other authorities that explicitly state that proposition, perhaps because it is so obvious.

The defendant's net worth can be relevant to punitive damages under Florida law, but that doesn't change the fact that the overall judgment can exceed the defendant's net worth. See, e.g., Young v. Becker & Poliakoff, 88 So 3d 1002, 1006 (FL 4th D Ct App 2012) (discussing principles of punitive damage awards under Florida law).

The fact that the defendant does not have much in the way of assets will not prevent the court from issuing a large judgment (if the case demands it). Indeed, large judgments appear to be a frequent factor in bankruptcy proceedings. E.g., In Re American Natural Resources, No 15-80355-TRC, 2015 Bankr LEXIS 2403 at *16 (Bankr Ct ED OK 2015) ("[I]t is not unusual for a judgment to precipitate the filing of bankruptcy.").
« Last Edit: January 15, 2016, 10:05:57 PM by Cathy »

shanesauce

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Re: A question regarding Bodily Injury Liability
« Reply #2 on: January 15, 2016, 10:23:35 PM »
So basically my options are the following:

a) Pay $38 month for $10k per person/$20k per occurrence of BI insurance

b) Save $38 a month but risk having to file bankruptcy if I am sued for a large sum of money


What would my fellow mustachians do?

SunnySaver

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Re: A question regarding Bodily Injury Liability
« Reply #3 on: January 16, 2016, 05:52:22 AM »
Me and my wife are not accident prone by any means but this doesn't mean we won't somehow be at fault in the future.

People are quick to make claims and file lawsuits. Have you also considered the cost to defend yourself in cases where you are not actually at fault?

CATman

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Re: A question regarding Bodily Injury Liability
« Reply #4 on: January 16, 2016, 08:23:26 PM »
As an insurance claims professional I'll give you my opinion:

I've worked liability and seen how fast the bills can add up. Add that you're in the state of Florida and the risk of fraud and fraudulent lawyers increases as well. Florida has the highest rate of insurance fraud in the nation. Regardless of how careful you may be, you can still cause an accident and or be sued by another party as a result of an accident whether your fault or not.

At the very least I would carry the minimum. However as stated earlier don't forget that even though you may not have assets, it doesn't stop a judge or jury from awarding another party damages which you would be responsible for.  One advantage of carrying even the minimum is that most policies will have a duty to defend clause which means your insurance company will mount a defense for you in the event a suit is filed against you. However, make sure you buy insurance from a reputable insurer as most of the cheaper ones would walk into a big lawsuit, settle for the policy limits, and leave you hanging out to dry for the rest. Working in the industry on the claims side has given me a pretty unique perspective.

electriceagle

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Re: A question regarding Bodily Injury Liability
« Reply #5 on: January 19, 2016, 03:01:37 AM »
This insurance is not required to drive in the state of Florida and I am currently paying $227 every 6 months for said insurance. Me and my wife are not accident prone by any means but this doesn't mean we won't somehow be at fault in the future.

From the little research I have done this insurance is recommended to basically shield your net worth from a lawsuit, given the fact that we have basically no net worth at this point in my life is it safe to say I can drop this insurance for the time being? I would assume that as you build up your net worth you would want to insure up to that value?

Any help is greatly appreciated.

Is saving $38/month enought to justify knowing that you would have to file bankruptcy if you were ever in a serious car accident?