Does Car Insurance Pay If It’s Your Fault?
Learn how your car insurance functions when you're responsible for an accident, covering your damages and those of others.
Car insurance offers financial protection even when you are responsible for an accident. Many drivers are uncertain about how their policy functions in such scenarios. This article clarifies how car insurance operates when the policyholder is determined to be at fault.
Understanding Fault and Liability Coverage
“Fault” in car insurance claims refers to the party legally responsible for causing an accident. When you are determined to be at fault, you bear the financial responsibility for the damages and injuries sustained by others. This is where liability insurance becomes important.
Liability coverage is a mandatory component in most states. It protects you financially if you cause harm to other people or their property. It typically consists of two main parts: Bodily Injury Liability and Property Damage Liability. Bodily Injury Liability covers medical expenses, lost wages, and other related costs for individuals you injure in an accident. Property Damage Liability pays for repairs or replacement of another person’s vehicle or property that you damage.
Liability coverage does not pay for damages to your own vehicle or for your own medical expenses. The coverage limits represent the maximum amounts your insurer will pay. If the costs exceed these limits, you could be personally responsible for the remaining balance.
Covering Your Own Damages When At Fault
While liability coverage addresses damages to others, separate coverages protect your own vehicle and cover your medical expenses when you are the at-fault driver. Collision coverage pays for the repair or replacement of your own vehicle after an accident, regardless of who caused it. This coverage has a deductible, which is the amount you pay out-of-pocket before your insurance covers the remaining costs.
For your own medical expenses, Personal Injury Protection (PIP) or Medical Payments (MedPay) coverage can provide assistance. PIP covers medical bills, lost wages, and sometimes other essential services for you and your passengers, regardless of who was at fault for the accident. MedPay offers similar coverage for medical and funeral expenses for you and your passengers, irrespective of fault. These coverages ensure your own injuries receive prompt attention.
How Fault is Determined in an Accident
The process of assigning fault after a car accident involves a thorough investigation by insurance companies. Adjusters gather various pieces of evidence to reconstruct the events of the collision. This often includes reviewing police reports, which provide a neutral third-party account and may note traffic violations. Witness statements from those who observed the accident are also collected to provide additional perspectives.
Physical evidence from the accident scene, such as vehicle damage, skid marks, and the final resting positions of vehicles, offers important clues. Photos and videos taken at the scene can further assist in understanding factors like speed, road conditions, and driver actions. Insurance companies also consider traffic laws and the actions of each driver leading up to the crash.
In situations where multiple parties share some responsibility, concepts like comparative negligence may apply. This legal principle allows for the allocation of fault among those involved, typically expressed as a percentage. In many states, a driver can still recover damages if their percentage of fault does not exceed a certain threshold. The amount of damages recovered is then reduced proportionally to their assigned percentage of fault.
Fault vs. No-Fault Insurance Systems
How car insurance claims are handled, particularly concerning injuries, largely depends on whether the state operates under a “fault” or “no-fault” system. In fault states, the driver determined to be at fault is financially responsible for the damages and injuries of the other parties involved. This means the at-fault driver’s liability insurance typically pays for the other party’s medical expenses and property damage. Injured parties in fault states can pursue compensation from the at-fault driver’s insurer.
In contrast, no-fault insurance systems aim to streamline injury claims. In these states, your own insurance policy, specifically Personal Injury Protection (PIP) coverage, pays for your medical expenses and sometimes lost wages, regardless of who caused the accident. This system helps ensure that injured individuals receive prompt medical care without needing to determine fault immediately.
While no-fault systems primarily apply to bodily injuries, property damage claims typically remain under a fault-based system even in no-fault states. If you damage another person’s vehicle or property, your property damage liability coverage is responsible for those costs. Some no-fault states also include “tort thresholds,” which limit an injured party’s ability to sue the at-fault driver for non-economic damages unless injuries meet a certain severity level or medical cost threshold.