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How Does Car Insurance Work When You’re At Fault?

how does car insurance work when you are at fault
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If you or someone you know has been involved in a car accident, you may have heard the phrase “at fault” used. Across the United States, there are no-fault states and at-fault states. A no-fault state means that you rely on your own car insurance to pay for any property damage or medical bills, regardless of whether or not you were the one who caused the accident. An at-fault state means that one of the parties involved will be listed as the at-fault driver. So, how does car insurance work when you’re at fault?

What Does it Mean to be At Fault?

If an accident was caused by driver negligence, that driver is said to be at fault or the driver to blame for the accident. If you’re to blame, you can be liable for any damages, including medical bills and property damage related to the accident.  Examples of driver negligence include, but are not limited to:

  • Speeding
  • Failure to yield
  • Equipment failure due to lack of maintenance
  • Impaired driving, including under the influence of drugs or alcohol and overly tired
  • Inattentive driving, such as texting and driving
  • Driving on the wrong side of the street
  • Failure to check blind spots
  • Aggressive or reckless driving
  • Failure to stop or following too close, resulting in rear-ending the other vehicle
  • Violating a pedestrian’s right of way

Why Is Fault Important?

In a fault state, determining who the at-fault driver is in an accident will ultimately decide who has to pay for the damages. If the at-fault driver has car insurance, their insurance policy will pay for medical bills and property damage under the minimum liability coverage required in most states. Some states also have a comparative negligence standard, assigning a percentage of blame to each driver, which is reflected in the amount of damages each insurance company will pay.

Determining Fault

Fault can be determined by the police, who will issue a report stating the facts of the case, including any statements from the parties involved as well as witnesses. If the police do not list an at-fault driver, your insurance company will need to work with the other driver’s insurance company to determine a level of fault for each of you. If the insurance companies cannot agree on fault, an insurance adjuster can be brought in to investigate and recreate the accident by using the details such as maps, photos, medical records, and statements.

If you’re involved in an accident, you should remember the following:

  • Do not admit fault or apologize, even if you believe you were the at-fault driver.
  • Call the police to have a formal accident report filed.
  • Do not move the vehicles unless it is a safety hazard.
  • Take as many photos of the scene as possible, including injuries, damages, and the surrounding area.
  • If anyone witnessed the accident, ask them for their name, address, and phone number, and request that they fill out a witness statement with the police.
  • Gather as much information on the other driver and vehicle as possible, including name, address, phone number, VIN, license plate, vehicle make and model, and insurance information.
  • Seek medical attention to rule out any unseen injuries.
  • Contact your insurance to inform them of the accident.

How Does Insurance Work When You’re At Fault?

If you’re the at-fault driver, your insurance will be responsible for various costs, depending on your insurance coverage.

Bodily Injury Liability Coverage

Most states have a minimum liability coverage requirement that covers bodily injury. When you’re the at-fault driver, your liability coverage will pay for any medical bills incurred by the other driver or anyone else hurt in the accident. Bodily liability has a per person and per accident maximum, depending on the limit you selected when you purchased your car insurance premium. All medical bills are submitted to your car insurance company, which will pay them up to your maximum limit.

For example, you have $25,000 per person and $50,00 per accident bodily injury liability. If you cause an accident that results in three people having injuries, their total combined claim cannot exceed $50,000, and no single claim can exceed $25,000.

Property Damage Liability Coverage

Property damage liability coverage is another insurance required by most states with a maximum per accident payout. This insurance will cover any repairs or replacement of personal property that sustained damage in the accident, including the other driver’s vehicle. It will not cover any damage to your property. Estimates are sent to your insurance company, which will pay for repairs or replacements up to your maximum limit.

Collision Coverage

Any damages to your vehicle or personal property would be covered by collision insurance. This type of coverage is not required unless you have financial responsibility, such as a lien or lease, on the vehicle to a third party that requires you to carry this coverage. If you have collision coverage, you will submit a claim to your insurance company along with estimates for the damages. When you purchased your policy, you selected a deductible that will apply to the damages before any insurance is paid.

For example, your vehicle requires $10,000 in repairs, and you have a $1,000 deductible. You’re responsible for $1,000, while the insurance will pay the other $9,000 as long as it’s within your maximum limit.

Will Your Car Insurance Premium Go Up After an At-Fault Accident?

Each insurance company is different, but you will likely see a rate increase when you renew your car insurance premium. In 2021, Forbes Advisor shared that the national average rate increase for drivers with a previously clean record after an at-fault accident is 41%. Other factors that will affect your premium include the severity of the accident and how much your insurance company had to pay for damages. For example, backing into another car in a parking lot with no bodily injury and minimal property damage won’t affect your rates as much as an accident caused by running a stop light and t-boning another vehicle.

No driver takes out car insurance hoping to use it one day, but if you’re at fault in an accident, you’ll be thankful you have car insurance. It’s important to note that having the bare minimum required car insurance isn’t always enough. Talk to your car insurance agent about how much car insurance is needed to protect you in the unfortunate event of an accident.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.

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About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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