I hear often that people are worried about losing their home in a lawsuit. Have you ever even heard of that happening? No. And why? Because you and I dont OWN our homes.
They would have to sue the bank to get it.
Same with a lot of your other items or so called "Assets". You dont really own them and the lawyers know that.
Caution on this: Snowfarmer covered some of it, but there are other implications. Realize that the mortgage (or loan) is not the same thing as the asset it's associated with. The bank loaned you money with a promise to get repaid. If you lose your house, truck, etc, through foreclosure, reposession or any other court order, you still owe the money - you just don't have the asset. Often, it is in the loan papers that if you do not have the asset, the entire balance of the note becomes due and payable immediately. Also, if any of the note is written off or otherwise adjusted by the lending institution, the forgiven amount is considered income by the IRS and taxed accordingly. Also, lets say you have insurance to cover $300,000. The award is for $3,000,000 spread over two defendents (you and the property owner). The judge has decided your share is $1,000,000. Your insurance will pay $300,000 and you still owe $700,000, plus atty fees and court costs. This is where their atty will file to force sale of assets, garnish wages, winnings, tax refunds etc. So, yes, you can and will be sued regardless of your financial situation. The result can be disastrous for years to come. Yes, the lawyer will go after "deep pockets" but also shallow ones because now he's getting paid for what he does, not on contingency basis like the initial lawsuit.
So, can you really afford going without insurance?
(I was drafting this while Snopower was posting)