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How does car insurance work if you’re at fault?

Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella...

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Reviewed byDaniel Walker
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UPDATED: Mar 19, 2020

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The lowdown...
  • Car insurance is for the purpose of lowering your financial risk as well as your legal risk
  • If you are in a “fault state,” it means that your insurance will have to pay if you are at fault
  • In a “no fault” state, it doesn’t matter who is at fault; each driver’s insurance pays for the damages
  • Knowing the rules on at fault accidents is important to avoid an increase in premiums and possible court costs.

Many people wonder what their insurance company will do if they are found at fault in an accident. First, it is important to know whether you are in a “no-fault” or a “fault” state.

A “no-fault” state takes the approach that individual insurance companies should pay for the damage or injuries done to a vehicle, no matter who is at fault. Some states who currently have no-fault laws include:

  • Florida
  • Michigan
  • New Jersey
  • New York
  • Pennsylvania

Get the coverage you need for the best price by comparing quotes from top insurers today.

The Problem with Insurance in No-Fault States

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All of these states require a driver’s insurance company to pay for damages regardless of who was at fault in the accident. The problem with this sort of arrangement is that the tendency for drivers to take the driver that was to blame for court increases.

Thinking that justice was not done by forcing their insurance to pay the damage and considering that their premiums may be increased because of it, causes some to take things into their hands and seek justice through the courts.

Negligence is a legal term meaning that a person knew or should have known that what they were doing would cause harm or risk to others.

For example, a restaurant which fails to leave a “wet floor” sign up when the floor is wet from mopping could be sued in the court of failing to warn customers of the danger.

In a similar vein, a driver who does something such as turning without signaling, darting out in front of someone or other reckless behavior that causes an accident would be considered negligence on the road.

The resulting accident would be ruled the fault of the negligent party, and legally, they are responsible for paying the damages.

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What is a fault state?

In a “fault state,” such as Arkansas, for example, the insurance company of the driver who is ruled at fault is the one who pays. This seems more just in many ways. After all, why should a person who did not cause an accident be forced to have their insurance pay?

It seems only fair that the person who caused the accident pay for the damages including the damages or injuries caused by the other driver. But in “no fault states,” this is irrelevant.

Regardless of what type of state you live in, you should always carry enough insurance to cover such situations in either case so that you will not have to go to court to handle it.

One way to offset the issue of the other party in a fault state that does not have enough insurance is to carry uninsured and underinsured coverage.

If you carry uninsured and underinsured insurance, your insurance will pay in those cases when the other driver who is at fault does not have enough coverage.

The Claims Process in At-Fault Accidents

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If you are considered to be at fault in an accident and you live in an “at fault state,” here is the process that you will go through when filing a claim.

  • You will call your insurance company and report the accident.
  • Your insurer will ask for a police report and who was determined to be at fault in an at-fault state.
  • The company will take your statement and tell you what to do next regarding documentation of your claim and signatures.
  • The insurance company will file your claim with their claims office and report the results and decision to you within a few days.
  • If there is damage to your car, an adjuster will be sent to your location to make an estimate.

Once all of this is completed, you will probably be asked to get two estimates from local body shops and your insurance company will issue a check for the amount to cover your damages, even if you were at fault.

You will then use this money to pay for the repairs on your automobile as well as the other driver’s vehicle is it was also damaged.

Rest assured that your car would be repaired, whether you are at fault or not. However, in an “at fault” state, your company will have to cover the damage to your car as well as the damage or injuries of the other driver.

Because this ends up costing your insurer money, it can raise your premiums if you are ruled at fault.

Defensive Driving Courses

One of the best things you can do is to take a defensive driving course. These courses focus on the most important aspects of safe driving and help you improve your skills when on the road so that you can avoid accidents.

Just being aware of the potential driving hazards on the road and how to avoid them can go a long way toward keeping your chances of an accident down.

Also, an added perk to taking a defensive driving course is that it may qualify you for a defensive driving course premium discount.

Ask your insurance company if they offer a discount for having taken a defensive driving course.

Shop and compare policies and insurance companies when shopping for insurance and make sure you consider all of the types of insurance that you might need to protect your property and yourself.

How to Keep Your Premiums Low

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The best thing you can do to keep your insurance premiums low is to keep your driving record clean. If you do have an accident that is ruled your fault, it will likely stay on your driving record for about three-five years.

But, with time, your premiums may go down for good driving history follow the accident.

Remember that you accumulate points for traffic violations and accidents so keeping these to a minimum is to your advantage.

Even if it is not your fault, accidents are the most likely to increase your premium so always be watching for potential hazards when you are on the roads to lower your risk of an accident.

Make sure you’re covered in case of an accident. Enter your zip code below to begin comparing top insurers side-by-side.

References:
  1. http://www.iii.org/issue-update/no-fault-auto-insurance
  2. http://injury.findlaw.com/accident-injury-law/proving-fault-what-is-negligence.html
  3. https://www.thezebra.com/insurance-guide/uninsured-motorist-coverage/
  4. http://www.safetyserve.com/ax/Default.aspx?id=14
  5. http://www.investopedia.com/articles/pf/08/car-insurance-costs.asp?ad=dirN&qo=serpSearchTopBox&qsrc=1&o=40186

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