Yes, it’s legally possible, and it’s also rare. Three things have to line up: a judgment above your insurance limits, an injured person who decides to collect the difference from you personally, and equity in your home beyond California’s homestead exemption, which shields $371,547 to $743,459 in 2026. A San Luis Obispo car accident attorney can tell you where your case stands.
The short version
Nobody can force the sale of your home unless a bid beats your homestead exemption plus every mortgage and lien on it, which almost never happens. What actually puts assets at risk is missing the 30-day deadline to respond to a lawsuit.
On this page
- What happens if the damages are more than your car insurance covers?
- Does California have PIP or underinsured motorist coverage for the gap?
- How does the California homestead exemption protect your home?
- Was the accident even entirely your fault?
- What happens if you ignore the lawsuit?
- Talk with Ernst Law Group about a San Luis Obispo crash
What happens if the damages are more than your car insurance covers?
Your insurer pays up to your policy limits and stops. The rest is yours to cover, and the injured person can go to court to collect it from your income and assets.
California car insurance minimums rose to 30/60/15 on January 1, 2025, so a minimum policy covers $30,000 per injured person. Against $180,000 in medical bills, that leaves $150,000 in dispute.
Most claims never get that far. A California insurer that rejects a reasonable settlement inside your limits can owe the whole verdict if trial goes worse, which puts your carrier first in line for an excess judgment.
Courts collect a surviving shortfall through wage garnishment, bank levies, and liens on property you own. A lien isn’t the same as losing your house; it gets paid when you sell or refinance.
Does California have PIP or underinsured motorist coverage for the gap?
California doesn’t sell personal injury protection. The optional coverages here are medical payments coverage, usually called MedPay, and uninsured or underinsured motorist coverage, which covers the injured driver when your insurance runs short.
It isn’t a shortcut, though. Under California Insurance Code section 11580.2, it doesn’t apply until your liability limits are paid out, and what it pays is reduced by what your policy paid. If the injured driver carries $100,000 and your policy pays $30,000, their carrier adds $70,000, not $100,000, leaving $80,000 of that $180,000 unpaid and still pointed at you.
How does the California homestead exemption protect your home?
It automatically shields part of your home equity from judgment creditors, no paperwork required. For 2026, it runs from $371,547 to $743,459, set by your county’s median single-family sale price and adjusted each January for inflation under California’s homestead exemption statute. San Luis Obispo County medians run well above that ceiling, so a homeowner here claims the maximum.
A creditor can’t sell your home without a court order, and if no bid beats your exemption plus every mortgage and lien, there’s no sale, and they wait a year to retry. If a sale happens, liens are paid first, then your exemption in cash, then sale costs, then the creditor.
On a $950,000 home with a $400,000 mortgage, a bid would have to top $1,143,459, so no sale happens. Equity far past the exemption, as on a $1.5 million home, clears that floor, and even then you keep $743,459 in cash.
Was the accident even entirely your fault?
Probably not entirely, and in California that changes the number. The state follows pure comparative negligence, so a jury assigns each person a percentage and cuts the award by the injured person’s share, with no cutoff.
That percentage comes off the top. Let’s say you ran a stop sign and they were doing 55 in a 35. They’ll argue a driver with the right of way needn’t anticipate someone running a stop sign; you’ll argue that at 35 they’d have had room to stop. If the jury puts 15% on them and values the case at $1,000,000, the award drops to $850,000, and that $150,000 comes off the exposure above your limits. Adjusters set these percentages early, so early evidence matters.
What happens if you ignore the lawsuit?
You have 30 days after being served to respond, and missing that deadline is the one path to your assets that’s entirely within your control.
A default judgment isn’t instant on day 31. The plaintiff has to request entry of default and serve a statement of damages first, since a California injury complaint can’t name a dollar figure. Once default is entered, you’ve lost the chance to argue fault or challenge damages.
Your insurer usually handles the response, since California’s duty to defend is broader than the duty to pay: if any claim is potentially covered, your carrier defends the whole case. Forward the paperwork the day it arrives, because the clock runs from service, not from when the insurer opens the file. And carry more than the state minimum, because the gap above your limits is what someone can pursue you for.
Talk with Ernst Law Group about a San Luis Obispo crash
If you were hurt in a crash you think was partly your fault, pure comparative negligence means you may still have a claim, and Ernst Law Group can tell you what it’s worth after the reduction. Don Ernst has more than 30 years of trial experience representing injured people throughout San Luis Obispo County.
Your first consultation is free, and we work on a contingency fee basis, so you pay no attorney’s fees unless compensation is recovered. Call (805) 541-0300 or contact us online to talk it through.
