Welcome to california…Where people make money the old fashion way…Sueing…
I really hope you have a nice big insurance policy with umbrella coverage.Because if you skimped on insurance and bought the lowest liability coverage you could find and you do get sued, I hope your insurance co doesn’t just decide to pay out the liability amount they are responsible for and then tell the plantiff to go after you directly for the remainder amount.
Happened to my parents, which some guy jammed a finger on something and they sued for $1million. Insurance company liability was like $100k, so the insurance company was about ready to cut a check for $100k and tell the plantiff to sue my parents directly for the $900k and tell my parents they are on their own in court. Fortunately upon investigation, the insurance co didn’t even think he should get more than $10k, so they ended up paying for the lawyer to settle out of court for $20k.
This brings me to my next question. When you have nothing to lose, rentals are great things. When one has significant money to lose, do people weigh the benefit of the incremental increase in income from a rental property versus the additional liability risk one is now exposed to? Just curious.
