Can I Lose My House Due to an At-Fault Car Accident?

Being found at fault in a car accident can have serious financial consequences, particularly if the damages exceed insurance coverage. In New York, drivers are required to carry liability insurance, but if the costs of medical expenses, property damage, and legal claims surpass policy limits, personal assets—including a home—may be at risk.

When Can Your House Be at Risk?

In New York, personal assets can be used to satisfy a judgment if an at-fault driver is sued and their insurance coverage is insufficient. This scenario typically occurs when:

• The injured party wins a lawsuit for damages exceeding insurance limits.
• The court issues a judgment requiring additional payment.
• The defendant lacks sufficient savings or liquid assets to cover the remaining amount.

Although state laws provide some protections, creditors may seek a lien on a property to secure payment. A Brooklyn personal injury lawyer can evaluate a case and determine whether assets are at risk following an accident.

New York’s No-Fault Insurance and Its Limitations

New York follows a no-fault insurance system, meaning that each party’s insurance typically covers medical bills and lost wages regardless of who caused the accident. However, no-fault insurance does not cover vehicle damage or severe injuries that exceed policy limits. When a victim suffers a “serious injury” as defined under state law, they can file a lawsuit against the at-fault driver. If a claim is successful and damages exceed the defendant’s policy coverage, personal assets—including real estate—may be pursued.

How Insurance Affects Liability

New York law requires drivers to carry minimum liability insurance:

• $25,000 for bodily injury per person
• $50,000 for total bodily injury per accident
• $10,000 for property damage

These amounts may not be enough for serious accidents to cover medical bills, vehicle repairs, and other damages. If an at-fault driver has substantial personal assets but low insurance coverage, they may be held personally responsible for the difference. Seeking legal guidance can help at-fault drivers understand their rights and potential financial exposure. Levitsky Law Firm PLLC assists individuals in evaluating liability risks and exploring legal options to protect their assets.

Homestead Exemptions and Asset Protection

New York provides specific protections for homeowners under homestead exemption laws. These laws prevent creditors from forcing the sale of a primary residence up to a particular amount of equity. In New York City, the exemption is $179,975, meaning if the home’s equity is below this threshold, it may be protected from legal claims.

However, the homestead exemption does not apply in all cases. If an at-fault driver has significant assets beyond their home, creditors may seek to recover damages through bank accounts, wages, or other property. Individuals facing potential liability should consult an accident lawyer in Brooklyn to understand available protections.

Steps to Protect Assets After an At-Fault Accident

Drivers concerned about losing personal assets should take the following steps:

• Verify insurance coverage: Ensuring adequate liability coverage and exploring umbrella insurance can reduce financial risk.
• Seek legal representation: An attorney can negotiate settlements that minimize personal liability.
• Understand homestead exemptions: Knowing how much home equity is protected can help assess risk exposure.
• Avoid transferring assets: Moving property or funds after an accident may be considered fraudulent and could result in legal penalties.

Drivers facing a lawsuit after an at-fault accident can visit our results page to learn more about legal outcomes in personal injury cases.

Legal Support for At-Fault Drivers in New York

Individuals involved in at-fault accidents must proactively protect their assets and comply with legal obligations. Proper legal representation can help reduce liability, negotiate settlements, and prevent unnecessary financial losses.

Levitsky Law Firm PLLC provides legal counsel for individuals facing lawsuits due to at-fault accidents. Our firm works to protect clients’ rights and assets while effectively addressing legal claims. Contact us today to discuss your options if you are concerned about potential financial risks after an accident.