How do financial affidavits come into play in car accidents? Why would a party have to complete a financial affidavit in a car accident case if he or she has car insurance? What information does a financial affidavit request in a car accident case? Do you have a financial affidavit form for Florida car accidents?
In this blog post, we will address these questions! Of course, if you have any questions not answered in this post, contact us.
Many people are quite surprised when financial affidavits come into play in car accidents. How exactly do financial affidavits come into play in car accidents? And why would a party have to complete a financial affidavit in a car accident case if he or she has car insurance?
Drivers must ensure they have adequate insurance coverage. Depending on your financial circumstances, you may need large insurance coverage limits. However, there are times and circumstances where people may not need high insurance limits. Lower coverage limits might be appropriate for people with limited assets, college students, or young people just entering the workforce. Of course, cost is a big factor, too, as Florida car insurance is very expensive.
But when a person decides to carry low limits, he or she may be exposing his or her personal assets.
How could this be?
Many people forget – or do not understand – that your car insurer is only responsible to provide coverage for the coverage limits stated in your insurance policy. So, for example, if you selected $10,000 in bodily insurance coverage, your auto insurer is only required to pay $10,000 in bodily injury coverage to an injured claimant. This is true even when the injured claimant’s damages far exceed $10,000, or even when the injured claimant dies.
Let’s use an example. Say you cause a car accident and, unfortunately, the person you injure sustains serious injuries. In fact, the person you injured has $500,000 in medical expenses and equally large damages for pain and suffering. In this example, if you opted for $10,000 in bodily injury coverage, this is all your car insurer is legally required to pay. Indeed, if the case goes to trial and the jury awards the injured party $500,000, your auto insurer is only responsible for $10,000 – you are responsible for the rest !
Because insurance companies are only responsible for the stated coverage limits, personal injury attorneys will see if the negligent party can contribute money out of their own pocket – apart from insurance – to settle the car accident claim.
To see if, and how much, the negligent party can contribute, personal injury attorneys will request the negligent party to complete a financial affidavit.
As can imagine, if a negligent party has sufficient assets to contribute to a settlement, a personal injury attorney will often demand that the negligent party contribute his or her own money to the settlement.
Unfortunately, there is no easy answer to this question. Understandably, people get nervous when they have to disclose their financial assets.
Every situation in which a financial affidavit is requested in a car accident case must be examined on its own merits. Let’s consider a couple of examples.
Let’s say the negligent party has low insurance limits – $10,000 bodily injury limits per claimant. The negligent party is asked to complete a financial affidavit after causing an accident in which the injury party incurred $250,000 in medical expenses and had to have surgery. The negligent party has little assets – he does not own any properties, does not own a vehicle, and has $500 in his checking account. In this circumstance, there is no downside to the negligent party completing the financial affidavit. This is because the negligent party does not have any meaningful assets to contribute or give to the injured party. In this example, it is unlikely the injured party’s attorney will ask the negligent party to make a contribution given the lack of assets.
Let’s consider another example. In this example, the negligent party again has $10,000 bodily injury limits and causes an accident which seriously injures the injured party. The negligent party owns a $500,000 home and has $300,000 in a protected retirement account. Should the negligent party complete a financial affidavit if he is requested to do so? In this example, the negligent party – despite having sizeable assets – might be willing to complete the financial affidavit. This is because the negligent party’s home, if homestead property, and protected retirement account, would be protected from a final judgment in the car accident case. So here, there is no downside to completing the financial affidavit. Even though the negligent party has significant assets, they would be shielded from a final judgment.
Again, every case is unique. If you are asked to complete a financial affidavit in a car accident case, speak with an attorney. An attorney will help you review the affidavit and see if you personal assets are subject to collection from a judgment.
In car accident cases, financial affidavits can range from simple to complex.
Some financial affidavits request basic asset information: monthly wages, checking account balance, savings account balance, stock market holdings, car ownership, real estate ownership, and other large assets valued over a certain amount.
However, other financial affidavits may be much more involved and comprehensive and be several pages long. In fact, in our experience we have seen financial affidavits which request the negligent party to state whether he or she owns any exotic pets!
Indeed, financial affidavits will simply vary from law firm to law firm.
Yes, please see the sample financial affidavit form for Florida car accidents:
You can also access the sample car accident financial affidavit by clicking here: Car Accident Financial Affidavit
Of course, this is a sample. Under Florida law, there is no rule or statute governing these situations. As a result, there is no uniform financial affidavit used in all car accidents cases. Again, the financial affidavit will vary from law firm to law firm.
Barthelette Law
At Barthelette Law, we handle car accident cases throughout the State of Florida. If you have general questions about the personal injury process, read the following blog post here.
If you were involved in a car accident, you likely have many questions and concerns about the future. It would be our privilege to speak with you about your car accident case. Call us at (561)246-4137.
