Lawsuits are very common nowadays, with an estimated 40 million lawsuits being filed every single year according to Forbes Magazine. Lawsuits can come with a lot of expenses, including legal fees for both those who sue and those being sued, as well as the cost of a judgement, which could result in a significant payout.
Over the last decade, payout amounts have been steadily increasing, especially those that are the result of a judgement related to Vehicle Liability or Premises Liability. The table below shows the average liability claims payout per year from 2015 through 2018.
Assets Exposed Table
| Year of Award | Average Vehicle Liability Award | Average Premises Liability Award |
|---|---|---|
| 2008 | $263,017 | $777,583 |
| 2010 | $193,928 | $570,248 |
| 2012 | $293,117 | $426,861 |
| 2014 | $444,020 | $475,861 |
| 2016 | $722,614 | $660,819 |
| 2018 | $864,019 | $803,003 |
This information can also be seen in the graph below, which shows the average judgement amounts for Vehicle Liability in Orange and Premises Liability in Blue.
What is Vehicle Liability?
Vehicle Liability is the legal responsibility you hold when owning and driving a vehicle. It is what holds you accountable in the event of an accident that you may cause.
What is Premises Liability?
Premises Liability is the legal responsibility that you have regarding accidents and injuries that take place on your land and/or premises.
The trends above show that payments resulting from lawsuits have increased in the past, and evidence indicates that they will continue to increase.
If you are sued and are facing a judgement, you will have to pay an amount of money that is decided by the court. This money can come from different sources, and each state has different guidelines for what can be seized by the court and what is exempt from seizure. The blurbs below apply to California Law.
Real Property
Real Property is defined as any land, or anything grown on, affixed, or built upon that land. One's Real Property, including homes, investment properties, and farms could be at risk of seizure and liquidation by a court. Consult California Code of Civil Procedure for most up to date information.
Read MoreAutomobiles
In the state of California one's vehicles could be subject to seizure and liquidation by the court. The proceeds of a sale of a motor vehicle could be used partly or entirely to satisfy a judgement with exceptions. Consult California Code of Civil Procedure for most up to date information.
Read MoreLiquid Assets
Liquid assets are defined as any type of cash whether on hand or in bank accounts, as well as investments in stocks, bonds, etc. These assets could be subject to seizure and liquidation. Consult California Code of Civil Procedure for most up to date information.
Read MoreFuture Wages
One's wages are at risk of being seized and/or partly garnished. "Paid earnings" are defined in California Code of Civil Procedure Section 706.011. Consult California Code of Civil Procedure for most up to date information.
Read MorePersonal Property
One's personal property includes items such as furniture, jewelry, appliances, clothing, and other personal items. These items could be seized and liquidated by the court in order to satisfy a judgement. Consult California Code of Civil Procedure for most up to date information.
Read MoreHow Insurance Can help you protect your Assets
One of the best methods to prevent a judgement in which your assets are liquidated in order to satisfy a judgement is to purchase an umbrella policy. An umbrella policy is an insurance policy that expands protection for one’s current policies. umbrella policies can be purchased personally or for one’s business, and are usually on the affordable side of insurance.
An example of an umbrella policy in action could occur after a vehicular accident. If your Auto Insurance Policy has a limit of $100,000 for medical costs, but the medical costs add up to more than $100,000, you might get sued for the rest of the money. An umbrella policy could prevent this from happening by raising the limits of your overall coverage, and it could also cover legal fees and judgement costs in the event of a lawsuit.
Everyone’s needs are different, which is why at the Archer Insurance Agency we make customized insurance plans for each of our clients. If you have any questions about insurance or are interested in an umbrella policy reach out to us via phone or email or click the links below!