Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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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 21, 2020

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Here's what you need to know...

  • It is important to know if contributory negligence or comparative negligence is followed in your state
  • Every state has unique laws and rules as to how insurance claims are paid and how fault is shared
  • The rules for physical damage to your vehicle vary dramatically from the rules for injury claims

After the dreaded moment when you are forced to file a claim in order to pay for your own damages, you are left with questions that can drive you mad.

Sifting through the Internet to really decipher the language written into your policy or various types of scenarios that can arise can be time-consuming.

It might seem like it is obvious that your policy will not pay for a claim when you are deemed to be the not-at-fault driver, but not all claims are so cut and dry.

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How do car insurance companies determine fault?


When a claim is filed, the initial person that you speak with will ask for basic information.

You might be asked when the claim occurred, where the claim occurred, the names of the other drivers, and whether or not there were injuries.

It is not until the claims file is assigned to a claims adjuster that you will be asked to make a recorded statement on exactly what happened.

Each party of the accident will have their own adjuster representing them. Every adjuster will do their own investigation in an effort to determine fault.

Once one adjuster submits their findings to the other, there is an opportunity for a response.

If there is no agreement as to which driver is primarily at-fault, it is possible that the claim can go to court where your insurer will represent you.

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What is shared fault?

Every state has unique laws and rules as to how insurance claims are paid and how fault is shared.

In very few cases is one driver deemed to be 100 percent at fault for damages in a loss. In actuality, each party contributes to a loss in their own way.

For example, in a rear-end accident, one driver may have slammed on their brakes while the other was following too closely.  This is considered a shared fault, where both drivers are guilty of errors.

Every state has their own procedures surrounding how a claim is paid when each party is negligent of driver error.

It is important to know if contributory negligence or comparative negligence is followed in your state.

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Here is a breakdown of the two:

Contributory Negligence

In a state with a contributory negligence law, anyone who is injured in an accident where they contribute to their injuries in any way cannot collect damages from another party to pay for their medical treatment.

The biggest limitations are placed in states with pure contributory negligence systems, but not many states operate under this type of system.

It is important to check to see if you live in one of the few states that still have this rule to see if you can even collect a claims payment when you are just 1 percent at fault for the loss that you were in.

While you are deemed to be not at fault for a loss when you hold less than 51 percent of the fault, you will have to find another way to cover your medical expenses if you live in a state with a harsh rule like this.

Comparative Negligence

Comparative negligence rules are becoming much more popular because it uses the amount of fault that belongs to each person before disbursements and payments are awarded.

Under this system, how much each person contributed to the collision will determine how much the party can collect.

For example, a driver who is 30 percent at fault for a loss that resulted in $100,000 of damage will only be able to collect $70,000.

How is a claim paid in a no-fault state?

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As if things weren’t complicated enough, there are also states that operate under a no-fault system.

These 12 states have their own unique laws that state that everyone must carry Personal Injury Protection that will pay for their own medical bills in an accident.

The fault determination does not matter in these states unless the injured party plans on taking the other driver to court for pain and suffering.

In a no-fault state, your Personal Injury Protection cover will pay for you and your family’s medical bills up to the limits that you carry.

In this scenario, your insurance will pay if you have a claim even if you are not negligent. The fault may matter when it comes to determining whether or not to raise your rates.

How is the damage to your vehicle covered?

The rules for physical damage to your vehicle vary dramatically from the rules for injury claims.

If you are less than 50 percent negligent for the loss, the other party’s insurance must pay to repair your vehicle or replace it for a reasonable amount of money.

The payment is made with the other party’s Property Damage Liability.

Unfortunately, there are scenarios where your insurance may need to pay for the damage and then recoup the money. This is done to get you back on the road when you have collision coverage.

You will be held responsible for your deductible if your insurer is forced to pay as a settlement agreement is being reached.

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