Can You Lose Your House Due to At-fault Car Accident in Florida?

The Florida homestead exemption protects your home from forced sale due to most debts, including judgments from car accident lawsuits. This exemption applies if your home is your primary residence. According to Florida law, the exemption covers properties up to half an acre in a municipality and up to 160 acres in rural areas.

Limitations of the Homestead Exemption

The homestead exemption only protects your primary residence. If you own other properties, those may be at risk if a court orders you to pay a judgment exceeding your insurance coverage. Additionally, the exemption does not protect against foreclosure or unpaid property taxes.

Other Protected Assets in Florida

Florida law also protects other assets from creditors, including annuities, retirement accounts, life insurance proceeds, disability benefits, and social security income. Business entities and certain irrevocable trusts may also provide additional asset protection.

Risks to Your Home After an At-Fault Accident in Florida

Lawsuits Exceeding Insurance Coverage

Car insurance policies have coverage limits. If a lawsuit results in a judgment that exceeds your policy, the injured party may seek to collect the difference. However, your homestead is protected, meaning the victim may not be able to recover the full amount of the judgment.

Judgments and Liens

If a judgment is entered against you, a creditor may place a lien on your non-homestead property. While this does not immediately force a sale, it may create financial complications if you decide to sell or refinance the property in the future.

Bankruptcy Considerations

If a car accident results in overwhelming financial liabilities, bankruptcy may be an option. Florida’s homestead exemption fully protects your primary residence in bankruptcy, regardless of its value, as long as you meet residency requirements.

How to Protect Your Home in Florida

Adequate Auto Insurance Coverage

Florida requires all drivers to carry a minimum of $10,000 in personal injury protection (PIP) and $10,000 in property damage liability (PDL). However, these limits may not be enough in a serious accident. Adding bodily injury liability (BIL) and uninsured/underinsured motorist (UM/UIM) coverage can help protect your assets.

Umbrella Insurance Policies

An umbrella policy provides additional liability coverage beyond standard auto insurance. It can cover legal fees and judgments exceeding your primary policy limits, offering extra protection for your home and other assets.

Asset Protection Trusts

An asset protection trust can help shield your home and other assets from creditors. This strategy is typically used for estate planning and should be structured carefully to comply with Florida law.

What to Do If You Are Sued for More Than Your Insurance Covers

Negotiating with the Plaintiff

In some cases, you may be able to settle for a lower amount through negotiation, especially if the plaintiff understands that your home is protected and difficult to collect against.

Payment Plans and Settlements

If you cannot pay a judgment in full, you may arrange a payment plan with the plaintiff. An attorney can help negotiate favorable terms.

Bankruptcy as a Last Resort

If a lawsuit results in a judgment you cannot afford, bankruptcy may eliminate or reduce the debt while allowing you to keep your home under Florida’s homestead protection.

Understanding Florida’s Car Accident Laws

No-Fault Insurance and PIP Coverage

Florida follows a no-fault insurance system, meaning your insurance covers your medical expenses regardless of who caused the accident. However, lawsuits can still arise in cases of serious injuries.

Florida requires drivers to carry PIP insurance, which covers 80% of medical expenses up to $10,000. This coverage applies regardless of fault.

Bodily Injury Liability Coverage

While not mandatory for most drivers, BIL insurance is recommended. If you have a history of serious traffic violations, Florida law may require you to carry BIL coverage.

Steps to Take After an At-Fault Accident in Florida

Contact Your Insurance Company

Report the accident to your insurer but avoid making detailed statements without legal advice.

Seek Legal Advice

Consult an attorney to understand your options and how to protect your assets.

Document the Accident and Your Assets

Keep records of the accident, including photos, police reports, and witness statements. Review your asset protection plan to ensure your home remains secure.

Frequently Asked Questions

What Happens if You Are at Fault in a Car Accident in Florida?

Your insurance pays for the victim’s damages. You may face a lawsuit, traffic citations, or higher insurance premiums.

Can You Lose Your House in a Personal Injury Lawsuit in Florida?

No. The Florida homestead exemption protects your primary residence from personal injury lawsuit judgments.

Can Someone Sue Me Personally After a Car Accident in Florida?

Yes, but only if they suffer serious injuries that exceed your insurance coverage.

Who Pays for Property Damage in a Florida Car Accident?

Your insurance covers property damage up to your policy limits.

How Long Does an At-Fault Accident Affect Insurance in Florida?

Insurance premiums may increase for three to five years after an at-fault accident.

Can They Take Your House if You Get Sued in Florida?

No. Florida’s homestead exemption prevents your home from being taken in most lawsuits.

How Do I Protect My House from a Lawsuit in Florida?

Use Florida’s homestead exemption, umbrella insurance, and asset protection strategies.

Is Florida a No-Fault State for Car Accidents?

Yes. Florida drivers must use their own insurance for medical expenses before suing another driver.

What Is the 14-Day Accident Law in Florida?

You must seek medical attention within 14 days of an accident to use PIP benefits.

What Happens When a Car Accident Claim Exceeds Insurance Limits in Florida?

The injured party can sue for the remaining damages, but your homestead remains protected.