How Do Insurance Companies Determine Fault in an Accident?

Last Updated on January 30, 2020

After a car accident, your insurance company and the insurance company of the other party in the accident will work together to determine who is at fault for the accident. Fault in a car accident will affect the amount of money you could potentially receive from the insurance company, as well as the amount you pay for insurance coverage in the future. It can be very difficult to determine fault after a car accident, as they happen very fast and both drivers’ actions can be difficult to assess after the fact. Here’s how insurance companies determine fault in an accident.

How does insurance determine fault in an accident?

Fault vs. No-Fault States

Car insurance law is different in every state, which will affect the way your claim is processed. Most states are considered fault states or tort states. In these states, the insurance companies will investigate the crash to determine who caused it. The party found at fault will then need to pay for the damages of the crash using their liability insurance. There is sometimes the option for the other party to sue for damages. In fault states, drivers are required to carry a certain amount of liability coverage whenever they are on the road.

Alternatively, in no-fault states, drivers will need to use their own insurance to pay for medical bills, regardless of who caused the accident. In these states, drivers are required to have something called personal injury protection insurance, which covers medical bills after a car accident. However, drivers can still be found at fault for property damage after an accident, and need to carry liability coverage for this. No-fault coverage only applies to medical bills. 12 states have no-fault laws, and three of those states give drivers the option to choose between fault or no-fault coverage.

How Do Insurance Adjusters Determine Fault?

There are many factors that insurance adjusters look at when determining who was at fault in a car accident. Adjusters will assess the entire case to figure out what happened and what factors caused the crash. Here are some of the things that adjusters look at to determine fault.

  • Police reports. It’s imperative to call the police right after a crash so they can take an objective look at what happened. The police will assess the condition of the car, and they will talk to everyone at the scene to get a complete picture of what happened. Since the police are relatively impartial, insurance companies will look to this report for details of what exactly happened during the crash.
  • Driver statements. Insurance adjusters will take statements from all of the drivers involved in a crash. This is very important because the drivers can explain what their intent was while they were on the road and if there were any external factors that contributed to the crash. You should never admit to fault after a crash, even if you think you were in the wrong. Instead, let the insurance adjusters take an objective look at the case and make the decision on their own.
  • Witness statements. If there were any witnesses to the crash, the insurance company will talk to them to get their account of the situation. This includes any passengers in the cars as well as other drivers on the road or pedestrians nearby. If you notice any witnesses nearby after the crash, ask them if they are willing to give a statement and make sure to get their contact information. Witnesses can really bolster your case and paint a more accurate picture of who is at fault after the accident.
  • Photos. If you can, you should take as many pictures as possible right after the accident. Although the police will also take photos, your pictures may capture your car at a unique angle that can indicate what happened in the crash.

Insurance adjusters will look at all of these unique factors to get a complete picture of what happened during the accident. They can then determine if either or both drivers were breaking any driving laws and assess fault levels from there.

What If Both Parties Are at Fault?

Because of the ambiguity of filing a car insurance claim, it’s relatively common for both parties to be partially at fault for the accident. How this situation is handled will depend on your state’s insurance laws and your insurance company. In most cases, both insurance companies will work together to assign a fault percentage to each party involved in the accident. For example, one party may be found 30 percent at fault while the other is 70 percent at fault. There are a few ways that this can affect the payout. In most cases, the person who was 30 percent at fault will receive 70 percent of the payout and vice versa.

However, in some states, you cannot receive a payout if you are found to be more than 50 percent at fault for the accident. In this situation, the person who was 70 percent at fault would not receive a payout, while the person who was 30 percent at fault will receive 70 percent of the total value of the claim. In some rare instances, you cannot receive a payout if any fault is found. In this situation, someone who is found to be 10 percent at fault for the accident still would not be able to receive a payout.

If neither party is at fault for the accident, most insurance companies will assign a 50/50 split, with each party receiving an equal amount of the payout. It’s also very common for insurance companies to negotiate using a number of multiplying factors to determine appropriate payouts. It’s important to communicate clearly with your insurance company throughout the entire claims process to ensure a fair payout. Make sure to keep thorough documentation of your car repairs, medical payments, and any other ways that the accident has affected your life.

What Happens If I Am Found at Fault in an Accident?

If you are found at fault in a car accident, your car insurance company will need to pay for the property damage and medical bills of the other party. If you don’t have enough coverage to pay for the damages, you will be personally held responsible for the rest of the costs, and the other party can opt to take legal action against you to recoup them. If you have collision coverage as part of your car insurance policy, your insurance will pay for damages to your car as well as the other party’s car. Although collision insurance isn’t mandatory in most states, it’s worth paying a little extra to know you are covered. If you’re found at fault in an accident, your car insurance rates will most likely go up afterward. If you’ve been found at fault in several accidents, you may have trouble getting coverage at all. In this case, you can seek coverage from a specialty insurer.

Determining fault after a car accident is a very complicated process. If you’ve been found at fault in an accident and you don’t agree with the decision, you can always contest it. If you decide to do this, you’ll want to work with a lawyer who specializes in car insurance to help you build a case.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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