Last time we discussed liability limits for your automobile insurance coverage and the danger of not having enough coverage. In Part II we are going to discuss other ways to protect your assets in addition to increasing your automobile insurance limits.
Insurance, Liability & Personal Property
First, you should be sure that your car is only titled in one name. Often couples think they should have both names on everything they own, such as a house or car. As to your home, the property should be owned by both husband and wife. The reason for this is because real property (home, land, etc.) cannot be sold to satisfy a debt owed by one spouse. In other words, if a husband caused a wreck where the injuries or damages exceeded his automobile insurance limits, then a house owned jointly could not be seized and sold to satisfy this debt.
However, if your car (personal property) is owned jointly, then any debt caused by an accident will attach to the real property you own together since the owner of the car has the liability and if the car is jointly owned, then both husband and wife will be liable for the accident, even if one spouse was in the car at the time of the crash.
You generally want to have everyone in your household under the same policy because the premiums are lower on a family plan than an individual plan. (An exception might be if someone in the house has a serious traffic conviction such as driving while impaired or reckless driving). (We will discuss automobile insurance points in a later blog).
You should also look at the purchase of a personal umbrella policy, sometimes called a PUP. Generally, you have to purchase an underlying policy of $300,000 or more of automobile liability insurance before you can acquire a PUP. But you can add an additional $1,000,000 of liability insurance coverage relatively inexpensively. In addition, a PUP may insure you for other types of liability, such as premises liability. An example of premises liability would be if someone were to get injured in your home due to your negligence.
The North Carolina Department of Insurance has an excellent brochure explaining the types of automobile coverage. For more information on this topic, please go to:
Please feel free to share this blog with your friends and family on this often misunderstood area of the law.
Next time, we will discuss Medical Payments Coverage in your automobile insurance policy.