Do You Pay Excess If Not Your Fault?

Individuals often wonder about insurance excess payments after an accident, especially when they believe they are not at fault. An insurance excess, also known as a deductible, is the initial amount a policyholder pays out of pocket toward a claim before their insurance coverage begins. This article clarifies how insurance companies assess responsibility for an accident and manage the excess payment in situations where the policyholder is not deemed liable.

Understanding Insurance Excess

An insurance excess is a predetermined sum a policyholder pays toward a claim before the insurer covers the remaining costs. Its purpose is to share risk between the policyholder and the insurer, discouraging small claims and potentially leading to lower premiums. When a claim is made, the excess generally applies to damage to one’s own property, such as a vehicle. For instance, if repairs cost $3,000 and the excess is $500, the policyholder pays $500, and the insurer covers the remaining $2,500. This payment is typically required regardless of initial fault to facilitate immediate repairs. There are often two types of excess: a compulsory excess set by the insurer and a voluntary excess chosen by the policyholder to reduce their premium.

How Insurers Determine Fault

Insurers investigate to assign fault following an accident, gathering various forms of evidence. This commonly includes police reports, which provide official accounts, and witness statements from individuals present at the time. Photographs and videos taken at the scene can offer visual proof of vehicle positions, damage, and road conditions. Insurers also consider traffic laws and legal precedents, such as right-of-way rules, to determine if any violations contributed to the accident. In complex cases, accident reconstruction specialists may be employed to analyze physical evidence and provide expert opinions. This comprehensive review helps insurers establish a percentage of fault for each party involved.

The Claims Process When Not at Fault

When an accident occurs and you believe you are not at fault, promptly report the incident to your insurer, even if you intend to pursue the at-fault driver’s insurance. Providing all collected details and evidence, such as witness contacts and photos, assists your insurer in their assessment. You generally have two main paths to pursue for vehicle damage: claiming through your own policy or directly from the at-fault party’s insurer.

If you claim through your own policy, especially for comprehensive or collision coverage, you might initially pay your excess to expedite repairs. This allows your vehicle to be fixed without waiting for the other insurer’s liability determination. Alternatively, you can file a third-party claim directly with the at-fault driver’s insurance company, which may avoid an upfront excess payment but could result in a longer resolution time. This approach depends on the at-fault insurer accepting liability.

If the other party is determined to be 100% at fault and their insurer accepts responsibility, your insurer will typically recover the costs of your claim, including your excess, from the at-fault party’s insurer. This process, known as subrogation, involves your insurer pursuing the responsible party for the funds paid out on your behalf. Once your insurer successfully recovers these costs, your excess is reimbursed to you; this process can take several weeks to a few months. In some clear-cut cases where fault is immediately accepted by the third-party insurer, your own insurer might waive the excess upfront, meaning you would not pay it at all.

Situations Without Clear Fault

There are specific situations where fault is not clearly assigned to another party, which can affect the policyholder’s excess payment. In hit-and-run incidents, where the at-fault driver cannot be identified, your own policy’s coverage, such as uninsured motorist property damage or comprehensive coverage, would typically cover the damages. In such cases, your excess would apply because there is no third party from whom to recover costs.

Similarly, if the other driver involved in an accident is uninsured or has insufficient insurance to cover the damages, your own policy’s relevant coverage, like uninsured motorist coverage, would generally respond. Under these circumstances, your excess would usually be applicable, as there is no solvent third party to pursue for reimbursement. When fault is genuinely disputed between parties, and insurers cannot agree on liability, you might still need to pay your excess to get your vehicle repaired. Recovery of this excess could be difficult, partial, or significantly delayed in such contested scenarios. For single-vehicle accidents, such as hitting a stationary object or encountering a road hazard, your excess will always apply since no other party is involved.