Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 28, 2020

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Here's what you need to know...

  • If you are responsible for causing the accident, then you are considered to be the at-fault party
  • If the at-fault party has liability coverage, their insurance company can pay for your car to be repaired
  • Some states mandate uninsured and underinsured coverage

If you’re involved in a car accident, you’ll probably have some questions. One common question that comes up is related to your rights to keep insurance money that you think you may be entitled to.

What you are entitled to will depend on the circumstances of the accident.

If you are without insurance, start comparing rates now by using our FREE tool above!

Table of Contents

At-Fault and Not At-Fault Accidents

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One way to categorize accidents is based on fault.

If you are responsible for causing the accident, then you are considered to be the at-fault party. If the other driver is the negligent operator, then they are the at-fault party.

This is an important distinction because it affects the monies you are entitled to keep.

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The Parties to a Car Accident

The benefits of an insurance policy are considered to be either first party benefits or third party benefits.

There can actually be three parties involved in a car accident:

  • The first party is the policyholder.
  • The second party is the insurance carrier.
  • The third parties are the parties that receive liability payments should the first party be negligent or at-fault and cause damages to third parties.

Scenario 1: When You’re Not At-Fault

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Let’s start with an accident where you are not at-fault. For example, you are on the main thoroughfare and another driver at a stop sign pulls into your lane of travel and does not yield the right-of-way.

The other party is the at-fault party in this scenario. In this case, let’s say the damages are minor and are only to the cars involved.

If the at-fault party has liability coverage, their insurance company can pay for your car to be repaired.

They can also put you in a rental car until your damages are resolved.

The beauty of this scenario is that you don’t have to pay your deductible. You should not have any out-of-pocket expenses.

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Scenario 2: When You’re Not At-Fault and the Other Party Has No Insurance

What if the other party does not have liability insurance? If you have collision insurance, your policy can cover your damages but, you will need to be responsible for your collision deductible.

Some states mandate uninsured and underinsured coverage. In some states, this type of coverage is optional.

It is actually coverage that you would find on your own policy and it is designed to protect you from at-fault parties that do not have insurance or whose limits of insurance are not great enough to cover damages.

If either of the situations noted above occurs, you may keep the money you are paid for your damages.

Oftentimes, the carrier insuring the at-fault driver may be delayed in completing their investigation which in turn delays their ability to resolve your damages.

In such a case, you may turn to your carrier to get your vehicle back on the road in a more timely manner.

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Subrogation: The Right To Recovery

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An at-fault carrier that initially could not or would not pay your damages may eventually do so.

If this occurs and you receive payment from both insurers, you are typically not permitted to keep the money received from your own carrier.

This is due to a clause in the insurance contract known as the subrogation clause.

Subrogation gives an insurer the right to recovery. This means that if your insurer has paid damages for an accident, your insurer is entitled to any benefits that may be received from the at-fault carrier.

In other words, you are not allowed to “double dip.”

Subrogation actually benefits the policyholder. If the damages are recovered for an accident that you were not negligent for, then the money is applied back to the damages paid under your policy.

This reduces your loss ratio. The better your loss ratio, the more favorable your rates.

Scenario 3: When You’re At-Fault

Now, what about an accident that you are responsible for? If you have liability coverage, the damages you cause to others will be paid by your liability coverage up to the amount of your limits.

As for the damages you sustain, those damages will be covered by first-party coverages.

Such coverages typically include:

  • Collision
  • Comprehensive
  • Personal injury protection
  • Med pay
  • Towing
  • Rental

These are coverages you purchase for your own protection. If you are responsible for the accident, you are entitled to the coverages and you are therefore entitled to the money associated with such coverages.

You may keep any amounts you are paid subject to any deductibles.

The easiest way to keep what you are entitled to straight in your mind is to understand that you can’t “double dip.”

While being involved in an accident can be frustrating and confusing, one of the important things to understand is what you are and aren’t entitled to keep.

You never want to be in the position of being involved in an accident without coverage, so use an online comparison tool to help find the best plan for you.

Start comparing car insurance rates now by entering your zip code in our FREE tool below!

References:

  1. https://www.allstate.com/tools-and-resources/car-insurance/liability-car-insurance-cover.aspx
  2. https://www.esurance.com/info/car/uninsured-and-underinsured-coverage
  3. http://legal-dictionary.thefreedictionary.com/subrogation
  4. https://www.geico.com/information/aboutinsurance/auto/
  5. https://www.infinityauto.com/knowledge-center/understand-insurance/what-difference-between-med-pay-and-pip-coverage
  6. http://www.injurylawyersandiegoca.com/blog/med-pay-coverage/