Q: In Colorado, can someone who loses a civil lawsuit related to a car crash lose their home and retirement savings?
I've been told that your home and retirement savings are protected in the event you lose a civil lawsuit. Is that correct? We have $500,000 per accident coverage in auto insurance and $300,000 coverage in homeowners insurance. I realize that medical bills can be far greater than that in serious crashes. We are trying to decide whether to buy umbrella insurance to add an additional $1 million in coverage. Since most of our assets are in our home and retirement accounts, we probably wouldn't purchase the umbrella insurance if our home and retirement money cannot be taken from us if a judgment goes against us.
A: First, talk to your agent. Generally, in a wreck, only the driver can be sued. In some states jointly held property can't be gotten if someone were to win. Unless the person is totaled, the plaintiff will settle for less than $500,000 unless they are a 30 year old skilled laborer and have multiple fractures. If you can afford the umbrella, then sounds like that may be worth the peace of mind you wish.
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