Legal disclaimer: I did not witness the accident or subsequent events and my statements here are solicitations for general nonexpert advice. My statements here do not necessarily reflect the actual circumstances and do not consitute testimony or affidavidt of the events.
My mother had a car wreck earlier this year in Texas where she is a resident. The insurance company paid her claim through collision insurance, which I might interpret to mean they determined it's her fault. She recently got notification from her insurance that the other party has retained a lawyer. It is my understanding that both cars were totaled and that none of the people involved went to the hospital immediately after or claimed injury at the scene.
My mother's only major assets are a retirement account (401(k) or 403(b) or something similar) and partial equity in her home residence, and she has considerable debt including negative equity from her recently totaled car. She's still employed and nowhere near the ability to retire. I think her liability coverage was Texas minimum, which if I recall correctly is $25,000 property damage and $50,000 personal injury per person up to $100,000. (I may be way off on the personal injury; it may be half that.)
We're panicking a little bit because we don't know what's next. I suppose the insurance company will have a lawyer to deal with this because they're on the hook for the first $X,000, but does my mom need to get a lawyer now, or when she's sued, or never? Is there a organization or web site that gives general advice for people who get sued, especially over car wrecks? Can she lose her retirement account or home if it came to that?
Lawyers are expensive, and I don't know where the break-even point between paying a lawyer and losing all your assets is; I mean, what does it matter if the lawyer gets it or the suing party gets it? It's still gone.