5 things you need to know if you're 'at fault' in an accident

Mitch Strohm

Knowing your state's car insurance laws and regulations is the best remedy for the headache that comes with being at fault in a car accident.

According to Phil Reed, senior consumer advice editor at automotive website Edmunds.com, in a traditional tort liability state, "at fault" means you're responsible for the accident -- plain and simple. The driver who's determined to be at fault in a tort system pays for any injuries or damage and may be reimbursed by his insurance company.

In a no-fault system, your own auto insurance company reimburses you, regardless of who's at fault. Simply put, at-fault systems don't restrict your right to sue, while no-fault systems do.

This difference is significant in the auto insurance claims process.

"If a crash between separate vehicles occurs, insurers and law enforcement authorities attempt to designate which driver was 'at fault' as part of the insurance claims adjudication process," says Michael Barry, a spokesman for the nonprofit Insurance Information Institute.

Adjudication refers to the process of paying or denying an insurance claim.

Being at fault in an accident can cause your premiums to rise, and you may be responsible for the repairs of all cars involved, Reed says. Depending on the severity of the accident, you may be dragged into a legal battle where your assets could be put at risk. The definition of "serious" differs in each state, but it can include major injuries such as broken bones and missing limbs. A non-serious accident might be a minor collision without any injuries.

Here are five things you need to know when you're "at fault" in an accident.

1. Rules vary from state to state.

Most states use a traditional fault-based system. But the definition for "at fault" differs from state to state, says John Mikkelsen, president of Mikkelsen Kelly and Kipp Insurance Agency in Illinois.

In some states, your insurance company will make a payment based on your degree of fault in an accident. For example, in Massachusetts you're considered at fault if your driving behavior was more than 50 percent of the reason for the accident. Determining fault ultimately rests with the courts in Massachusetts, but certain scenarios help insurers decide who's at fault. For instance, you'll be tagged as 50 percent at fault in Massachusetts if you crash into a car going in the opposite direction on the correct side of the road.

These are the 12 "no-fault" states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah.

2. Determining fault is complex.

Generally, there are several ways to determine who's at fault, Barry says.

In an at-fault system, claims adjusters -- investigators who figure out the extent of the insurance company's liability -- can determine fault, Mikkelsen says. If claims adjusters can't agree on who was at fault, a mediator makes the decision. If a dispute remains over the adjusters' or mediator's decision, it typically winds up in court.

3. You can be sued.

In an at-fault state, the other driver maintains the right to sue you if you're at fault.

"As part of your insurance coverage, your insurer provides legal representation for you if you get sued," Barry says.

But the company represents you only to the extent of the dollar limits in your policy. Mikkelsen says insurance companies will advise you to hire an attorney if another driver demands an amount of money that exceeds those limits.

If you think your insurance company hasn't been fair, it might be wise to hire an attorney.

"If you are a high-risk driver with a non-standard company, you might have an issue with your claim being settled to your satisfaction," Mikkelsen says.

"Non-standard" insurers accept pretty much any driver as a policyholder, regardless of traffic tickets or accidents. Those insurers have a reputation for delaying claims.

In no-fault states, a seriously injured motorist can sue a driver.

Wherever you live, don’t admit fault immediately.

"In the haze that follows an accident, you may not remember everything clearly. If you admit fault right away, not only could you be wrong , but you could have ruined your chances of ever proving otherwise," Reed says.

4. Premiums can be affected.

Whether you’re in an at-fault or a no-fault state, your insurance premiums may rise after an accident, Reed says. But they aren't guaranteed to go up. Auto insurance premiums are calculated based on dozens of variables, only one of which is whether the policyholder recently has filed a claim, Barry says.

5. Certain coverage is required.

Every state except New Hampshire requires a driver to carry auto liability insurance, according to the Insurance Information Institute.

The minimum amount of liability coverage varies by state, but the Insurance Information Institute recommends purchasing higher liability limits than the minimum. Accidents generally cost more than the minimum limits, which means you could end up paying out of pocket for an accident if you're at fault.

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