Under Florida law, your home is protected from forced sale by creditors due to the state’s homestead exemption. This means that if you’re found liable in a car accident lawsuit, your primary residence cannot be taken to satisfy the judgment.
The Florida homestead is the most protected asset in the country, but there are conditions. The exemption applies only to your primary residence, meaning second homes, rental properties, or vacation properties do not receive the same protection. The protection is limited to 1/2 acre or less if located inside a municipality, or 160 acres or less if located in an unincorporated county area.
What’s particularly important about the Florida homestead protection is that it is immune to fraudulent conveyance attack. A person who is sued due to an at-fault car accident can afterward purchase or improve a Florida homestead. The newly acquired homestead equity will still be protected.
Understanding Liability After a Car Accident
When you are at fault in a car accident, you could be responsible for damages to the other driver’s vehicle, medical bills, and other costs associated with the accident. In these cases, insurance coverage is your first line of defense. Florida drivers are required to have minimum insurance coverage, which includes (1) $10,000 of medical expenses, regardless of who caused the accident and (2) damages to the other driver’s vehicle or property, with a minimum requirement of $10,000.
However, these minimums often fall short in serious accidents. If your insurance coverage is insufficient, the injured party may pursue a lawsuit against you for the remaining damages.
What Happens If a Lawsuit Exceeds Your Insurance Coverage?
If damages exceed your policy limits, the injured party may seek a judgment against you and try to collect your assets. This can include bank accounts, investment accounts, and personal property like vehicles or valuable collections. But your primary residence remains protected due to Florida’s homestead laws.
In addition to the homestead protection, Florida law also limits wage garnishment and exempts certain retirement accounts, life insurance proceeds, and annuities. These protections are designed to prevent extreme financial hardship while allowing plaintiffs to recover damages from other available assets.
complete guide
How to Protect Your Assets After a Car Accident
About the Author
Gideon Alper is an attorney who specializes in asset protection planning. He graduated with honors from Emory University Law School and has been practicing law for almost 15 years.
Gideon and the Alper Law firm have advised thousands of clients about how to protect their assets from creditors.
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