What if you cause a serious car accident in Alaska and are at fault? Beyond the immediate concerns, you might wonder: Will this incident cost you your home?
Being proactive, knowing your legal rights, and hiring an Alaska accident attorney to protect your assets is essential.
Understanding Liability, Comparative Fault, and Insurance Coverage in Alaska
Alaska follows a modified comparative fault system called the “51% bar rule.” If you’re determined to be responsible for more than 51 percent of an accident, you’re not entitled to recover damages.
On the other hand, if you are less than 50% at fault, you can recover damages, but your percentage of fault reduces those damages. For example, if you were found 50 percent responsible for causing an accident that resulted in $100,000 in damages, you would be entitled to $50,000.
Find a personal injury attorney to help with evidence, such as police reports, accident scene photographs, eyewitness testimonies, and accident reconstruction specialist analysis, which can be used to help determine fault. Taken together, these pieces of evidence help to assign blame for the incident.
Alaska requires minimum liability insurance of $50,000 per person for bodily injury, $100,000 per accident for bodily injury, and $25,000 for property damage.
But these minimums don’t cover the damages that can come from accidents. You are liable for the remaining amount if your damages exceed your insurance coverage.
Personal Liability for Damages Exceeding Insurance Coverage
The injured party can seek your remaining compensation if your insurance doesn’t cover all damages from an accident for which you’re at fault.
That can result in serious financial consequences, including wage garnishment, liens on property, or even asset seizure. In such cases, your assets, like your home, could be vulnerable to judgment.
Typical Scenario Where You Could Lose Your House
Let’s say you’re the bad guy in an accident that costs $75,000 in medical bills and $50,000 in property damage. The $50,000 shortfall is covered by your insurance up to $100,000 for bodily injury and $25,000 for property damage.
If the injured party wins a court judgment against you for this amount and you don’t have enough liquid assets to pay it, your home could be seized by creditors who are trying to collect on the debt.
Alaska’s Homestead Exemption
Alaska has a homestead exemption to shield homeowners from having their primary residence taken by creditors. In 2023, this exemption applies to up to $54,000 of equity in your home.
But it has limitations. The exemption does not cover certain debts, such as tax liens or consensual mortgages, and creditors can still place a lien on your property. The homestead exemption gives you security but may not fully protect your home if your equity exceeds the exempted amount.
What To Do To Protect Your Assets
Facing potential asset seizure can be daunting, but you can take steps. A legal avenue to bankruptcy can discharge some debts and start over. But it’s a serious decision with profound long-term implications for your creditworthiness.
Or, you can negotiate with the plaintiff to set up a payment plan to avoid an immediate asset seizure.
Losing your home after an at-fault car accident in Alaska is rare, but it can happen. Review policies, consult an attorney, and secure adequate insurance to protect your assets effectively.
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