Q: A car/pedestrian accident happened two years ago led to a $10-million lawsuit. My insurance only covers $100K. What should I do to resolve this lawsuit?
A: If the judgement exceeds your insured amount, you probably have to pay the remainder. Having said that, the average small accident without serious injury will unlikely reach $10 million judgement. Any amount, which exceeds your insurance, cannot tap into your estate or your house if you own the property jointly with your wife.
The best outcome would be if you purchased an umbrella insurance which can supplement your auto insurance-any exceeding amount above your current auto insurance can be covered by the umbrella insurance.