It may be common knowledge that when you’re in an accident and you’re at-fault, your insurance rate will most likely increase. However, you don’t have to be at-fault in an accident to potentially see a rise in your premium cost. Let’s go over what it means to be at-fault, how it’s determined, and some common myths around being at-fault in an accident.
What does it mean to be at-fault?
At-fault means that you’re considered liable (a.k.a responsible) for the damages and/or injuries that others suffered in an accident. If you’re found to be at-fault, your auto insurance company will have to pay the other party’s claims, unless there’s a reason why you as an individual are entirely at-fault.
Being at-fault doesn’t necessarily mean that the other parties involved don’t share part of the blame. For example, in multi-vehicle accidents, all parties involved may be assigned a percentage of the liability. However, the person found to be primarily responsible is who will have to pay the associated claims. In many states, simply being found fifty-one percent responsible shifts the financial burden to you and your insurer.
In some situations, you’ll be obligated to pay the percentage of the damages assigned to you, while the other person’s insurance will claim the remaining damages. In that instance, you could be obligated to pay eighty percent of the total damages while the other insurer would pay the remaining twenty percent. It’s important to note that this is the total of all related medical bills and car repair bills, not eighty percent of your personal losses.
Additionally, you’ll usually only be expected to pay the amount up to your deductible before your insurance coverage kicks in. Let’s say you caused an accident that resulted in $5,000 worth of damages to the other person’s car. If you have a deductible of $500, you’ll only have to pay $500 out-of-pocket, and your insurance provider will cover the rest. Remember, you get to determine how high or low you want your deductible to be, and can raise your deductible any time to save money on your monthly insurance payments.
At-Fault Versus No-Fault
Put simply, a no-fault accident is one you didn’t cause. However, it’s possible to be in a no-fault accident where you may be in part at-fault (bear with us, we know this can be confusing). This can happen because there are a number of states that have no-fault insurance laws. In these sixteen states, you’re required to carry Personal Injury Protection (PIP) as part of your auto insurance policy (though it’s something that can be helpful to have on your policy no matter what state you live in).
How is fault determined in a car accident?
Fault is determined by the claims adjuster assigned to your case and the state where the accident occurred (i.e. police). Physical evidence and witness statements are the primary means of determining who is at-fault in auto accidents. Physical evidence may include dash cam video, information from data recorders, and pictures of the accident scene. Breathalyzer tests and medical bills are also considered physical evidence.
Witness statements can include statements from the drivers, bystanders, and police. This is why it’s critical that you get the contact information of people who say what happened, those who may have stopped to help after the accident, and the information of the other drivers involved.
It often happens in claims that no one is determined to be at-fault. Some examples of this could be:
- You lose control of your car on an icy road due to a lack of proper road maintenance.
- You cause an accident swerving to avoid a deer or other obstacle
In other cases, it can be nearly impossible to determine who is at-fault. This can happen when:
- Witnesses can’t agree on what happened, and the attending police officer has little evidence to support either side of the story. The police officer may decide not to assign fault to either party.
- Your car is damaged in a hit-and-run —there’s often no evidence to determine who hit you, so there’s no way to file a claim against their insurance.
Let’s debunk some myths around being at-fault.
Myth: My insurance won’t go up if I wasn’t the one at-fault in an accident.
It used to be the rule of thumb that if you weren’t at-fault in an accident, that you wouldn’t suffer any negative impacts to your car insurance policy. However, most insurance carriers now take all loss history in account in some shape or form when determining your insurance rate. Every insurance provider prices differently, but your premium could increase depending on the situation of an accident, your claims history, and the type of coverage plan you have.
There are potential exceptions, of course, such as:
- You have accident forgiveness added on your insurance policy that may apply to certain accidents.
- If no claim is filed with the insurance company, then your insurance rates may not go up.
- However, it’s always in your best interest to make sure a claim is filed. It may be tempting to try and resolve the issue one-on-one with the other party, but the chances of this backfiring on you are pretty high. If they come back with “newly discovered” damages, you’ll either be on the hook for a large bill, be forced to file a claim at that point regardless. There’s also the chance that your insurance will find out about the accident on their own from police reports, or if the other person decides to try and file a claim against you—both of which will raise your premium.
Myth: I’m not responsible if someone else drives my car and gets into an accident.
This myth has a germ of truth. If someone steals your car and gets into an accident, they’re personally liable for the bill. But what happens if you gave them permission to drive your car? You and your insurance provider would be on the hook for any bills for damages. This is because auto insurance is usually tied to the vehicle, not the driver, and you gave your consent for them to drive it.
The costs will be assigned to the person found to be at-fault for the accident. If it wasn’t your friend’s fault and the other party is found to be at-fault, you’re golden. However, if your friend driving your car is found to be at-fault, then your insurance will have to pay the property damage. If you don’t have Collision Coverage, then you will likely have to pay for the damage to your own vehicle. You’re also still responsible for paying your deductible first before your insurance helps to cover any costs.
Fortunately, if you do let someone borrow your car, any traffic tickets they incur should affect only their insurance, not yours — but that’s not a guarantee. If someone is regularly driving your vehicle (i.e. someone you live with) and isn’t currently on your auto insurance policy, you should seriously consider adding them. While it may increase your premiums, it also provides greater protection if they’re in an accident. If you list them as an occasional driver, it may not affect your rates at all unless they have a terrible driving record.
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We’ve reviewed a lot of stressful situations, but having the right insurance provider and policy means always knowing you have help in your corner. Get a quote with us today to start seeing how you can save on great protection.