At-Fault vs. No-Fault Accidents

What Is an At-Fault vs. No-Fault Accident?

Fault helps determine who is responsible for paying for property damages or injuries in an accident through either property damage liability or bodily injury insurance coverage. How fault is shared relies on whether you get into an accident in an at-fault state or no-fault state.

In at-fault states, the at-fault driver is responsible for covering property damages and medical costs for both parties. In no-fault states, your own personal injury protection (PIP) insurance or medical injury provider will cover your medical bills, regardless of who is at fault in the accident. Liability insurance, on the other hand, pays for the other driver and their passengers after a car accident.

Depending on the state you’re in, you may or may not be eligible for a payout based on the negligence laws and your degree of fault. In Minnesota and Connecticut, for example, you can’t receive any compensation if an insurance adjuster determines that you’re 51 percent at fault or more. In other states, like Maryland, you won’t receive a payout if you share any fault.

Similarities

Although there are a lot more differences between at-fault and no-fault accidents, there is one important similarity between the two. If you are found to be at fault in an accident, you will have to cover all property damages, regardless of where you live.

That means you should expect the other driver to submit a third-party claim to your provider if you’re at fault in an accident in both at-fault and no-fault states. “Third-party” means that the no-fault driver files the claim through the other party’s provider (third-party) instead of their own provider (first-party).

Comparative Negligence

States with comparative negligence laws allow for partial fault for both parties, which means that you can split the costs according to the degree of fault. Comparative negligence is broken down into two types of negligence:

• Pure comparative negligence: Regardless of how negligent or at fault you are in an accident, you can recover some money if you’ve suffered injuries in an accident (even if you’re more responsible than the other driver).
• Modified comparative negligence: In modified states, you can only receive compensation if you’re within a threshold of fault. For example, if you’re in New Jersey or Iowa, you can only receive compensation if you’re less than 51 percent at fault.

Contributory Negligence

In these states, you can’t receive any compensation if you’re found to have any level of negligence in an accident.

How to File a Claim in a No-Fault State

The process for filing a claim in no-fault states is fairly simple:

1. Make a third-party claim: Contact the other party’s insurance provider and file a third-party property damage claim.
2. Make a first-party claim: If you suffer any injuries in the accident, you’ll have to file a PIP coverage claim through your own provider (first-party claim).

How to File a Claim in an At-Fault State

The process for filing a claim in an at-fault state is similar to no-fault states. Here’s what you would do if you’re at fault in the accident:

1. File a third-party claim: File a third-party claim for both property damage and bodily injuries.
2. File a first-party claim: If you suffer any injuries or property damage and you have collision coverage or medical payments coverage, you can file a first-party claim for your losses.
3. Determine payout: Your insurance provider will take care of the rest of the process to determine fault in the accident. You might be fully at fault, partially at fault or not at all at fault.

How Fault is Determined

In some cases, it’s very easy to determine fault. Either one driver admits fault in the car insurance claim and police report or the evidence indicates fault. In other cases, it can be tricky, especially if you’re in a state with partial fault laws. In any case, after the insurance adjuster determines fault, your local laws will determine how payments are distributed.

If you find yourself in an at-fault accident, there’s a good chance your provider will increase your premiums. How high your premiums will increase depends on a few factors:

• Your state
• Your provider
• Your driving history
• The cost/severity of the accident
• Your degree of fault

Here are a few average annual cost increases after at-fault accidents from a few top providers:

The difference between at-fault and no-fault accidents can determine your premium rates, how much compensation you’re owed (or owe), how complicated the claims process will be and what kind of rights you have in the claims process. Because each state is different, it’s important to know the different types of negligence and municipal laws relevant to your state.