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At-Fault and No-Fault Accidents

At-Fault and No-Fault Accidents

Whether you’re involved in an at-fault accident or a no-fault accident can have a tremendous impact on the way your auto insurance coverage works following a car accident.

Generally speaking, it makes perfect sense that the person at fault in a car accident — that is, the person who caused the car accident to happen — should be on the hook to pay or have their auto insurance coverage pay for any medical, injury or property damage costs. Unfortunately, it’s not always that straightforward when it comes to accessing insurance funds.

First, there is the issue of determining who is at fault in an accident, which can be easier said than done. Determining fault and how insurance gets involved varies from state to state, with both at-fault states and no-fault states operating under a different set of laws and subsequently having different auto insurance coverage requirements, including the need for no-fault insurance in no-fault states. Read on to learn more about determining who is at fault, how states laws can vary, and how no-fault insurance works.

Determining Fault in a Car Accident

Determining fault in a car accident is a matter of figuring out the degree to which each driver involved was responsible for causing the accident. Nobody wants to be found to be at fault in an accident because it not only costs money in the auto insurance claim for that accident but also can cause your auto insurance coverage rates to increase due to the new blemish on your driving record.

A couple of key things can come into play when it comes to determining who is at fault in a car accident:

  • State Laws — Determining fault is done according to state law where the accident took place. Each state's rules vary, so it’s a good idea to investigate the traffic laws where you live to see whether you’re really at fault. It’s also possible that while you were partially at fault, the other party in the accident — whether a driver, a biker, or a pedestrian — could have been violating traffic laws and might share some of the responsibility. Traffic laws for your state can be found online or at your local DMV. You can also contact a local car accident attorney to learn more about the rules in your state.
  • Police Reports — The police report offers an objective view of the accident and may include information on whether alcohol or drugs were involved, which traffic laws may have been broken, or who the officer decided was at fault.

At-Fault States and No-Fault States

States are divided into two main categories of how they deal with fault and insurance payouts in automobile accidents — at-fault states and no-fault states — although there is significant variation within the categories. Most states are at-fault states.

How Car Insurance Works in At-Fault States

At-fault states have a tort liability system of auto insurance. This means that the driver who caused the accident, or his insurance company, is responsible for all damages to other parties involved in the accident. This may seem like a fair way to handle it, but it has the unintended consequence of clogging the legal system with accident claims. After all, if an at-fault driver denies he was at fault — and why wouldn't he? — there is no other avenue besides court to force him or his insurance company to pay.

How Car Insurance Works in No-Fault States

To avoid the massive legal costs of determining fault, some states have shifted to a no-fault system of auto insurance for handling accidents.Twelve states current have no-fault insurance systems in place: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.

In no-fault states, drivers do not have to prove that someone else caused the car accident in order to be reimbursed for costs from their own insurance company. This is because no-fault states require their drivers to carry Personal Injury Protection (PIP) insurance, also known as no-fault insurance. With PIP or no-fault insurance, a driver’s insurance company usually pays all medical bills automatically. These states require minimum levels of personal injury or no-fault insurance, shifting the cost of medical damages from the insurance company of the at-fault driver to the insurance company of the injured party. The trade-off in states that operate with PIP or no-fault insurance requirements is that injured drivers cannot sue for pain or inconvenience damages unless their medical bills cross a certain threshold beyond what no-fault insurance will pay or the injury is deemed "severe" by state law. Damage to the car and other property, however, is still based on fault, so while no-fault insurance is required, it’s a good idea to carry other insurance coverage in addition to no-fault insurance to pay for any accident-related costs beyond your own medical needs.