Legal Question in Civil Litigation in California

Re: At fault in acciedent, wondering if money is protected if it's in equity

You are in a very tenuous position right now for many different reasons that I am not allowed the space or words to properly address. However, you are also in a position where some good advice from an attorney who is well-seasoned in insurance law can make a big difference in what becomes of your personal assets.

The "policy limits" demand by the injured cyclist should have already caused your insurance company to pay the claim immediately if you were at fault and also did not have a policy with limits sufficient to cover the true worth of the claim (i.e., the range of probable jury verdicts).

At this point in time, by definition, you have adequate insurance policy limits to "cover his injuries" because, by demanding the policy limits in settlement, the attorney for the cyclist is saying that he is willing to take the full amount of the limits of your policy and walk away with nothing else.

To briefly address your concern over the risk of your personal assets:

When you entered into the contract with your insurance company, the very essence of that deal was that you would pay a certain premium, and in exchange for your payment, the insurance company would pay for damages you cause to persons or property, up to the policy limits, and pay for your attorneys in the event you are sued.

If, in mid December, your insurance company was given a reasonable opportunity to settle your claim for some amount within your policy limits and they elect NOT to do so, then well-established Calfornia interpretations of insurance law state that they have refused settlement at their own risk and not at the risk of your personal assets. This is known as "opening the policy," and in the appropriate circumstances means that you no longer have any policy limits--the insurance company must pay for the full amount of any settlement or judgment.

As for your home, it is not true as a general rule that judgment creditors will refrain from placing a lien upon, or seeking payment through the forced sale of, your home. The analysis is fact specific and imbued with uncertainty as, by that stage, your fate is in the hands of others.

The "homestead act" is a provision in the civil code (I believe that's where it is) that protects equity in your home from judgment creditors up to a certain limit (I believe the amount of equity currently protected under the statute is around $115,000.00 but it has been a while since I have checked).

Regardless, GO GET A GOOD, EXPERIENCED INSURANCE LAW ATTORNEY RIGHT NOW. With just a little bit of input and guidance, they may be able to garner you more insurance than you ever could have or would have purchased on your own. They will also tell you things that will make you sleep better at night.