Fault vs. No Fault Auto Insurance Laws

Understanding fault vs no-fault auto insurance laws can be essential in figuring out how much an auto accident is going to cost you. Who pays for car damage in a no-fault state can be different than in an at-fault state. In no-fault states, no-fault insurance is required for all drivers and each driver in an accident is responsible for their own damages and injuries. There are many more at-fault states vs no-fault states, though. In fault-based states, the driver who caused the accident or is most "at fault" will be responsible for the damages caused to the driver who was not at fault.

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Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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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 in...

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Reviewed by Rachael Brennan
Licensed Insurance Agent Rachael Brennan

UPDATED: Jul 19, 2021

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If you get into an accident, you may be in for a long, confusing, stressful, and potentially expensive claims filing process. In the event of a collision with another driver, one of the most important things for knowing how to file an auto insurance claim and determining whether it’ll be honored as well as who pays for what damages depends on who was at fault in the accident.

It also depends on the various circumstances that led to the collision in the first place. Below, we will try to help you sort out the differences between at fault, no-fault, and the various ways in which fault is determined.

Fault vs. no-fault auto insurance laws can definitely be hard to understand. If you’re as confused about the processes as most drivers are, then you should definitely keep reading.

If you want to make sure you’re getting the best rates, use our FREE tool to compare auto insurance rates.

Different Laws in Different States

In the majority of states across the country, when two drivers get into a wreck, one driver is deemed at fault and the other is not. Of course, the degrees of fault which each state’s laws attribute to the negligent driver are complex and vary from state-to-state. But there are a handful of states where there is a third option: these are called “no-fault” states.

Average Insurance Premiums (No-Fault States)Legend: Average Premiums UtahKansasKentuckyMassachusettsNew YorkNew JerseyPennsylvaniaMichiganFloridaMinnesotaNorth DakotaHawaii 20406080100120140160180200220240260280300$149$170$188$201$147$238$180$319$229$170$214$175

In a no-fault state, two drivers can get into a collision and, based on the circumstances of the accident, neither driver can be assigned blame. In these states, it is mandatory to purchase personal injury protection coverage since you may not be able to file a claim against your own liability coverage, or the liability coverage of the other driver. Personal injury protection (PIP) pays medical expenses for you if you are injured in the accident and no one is at fault. Here are no-fault states the states where PIP insurance is required:

  • Utah
  • Kansas
  • Kentucky
  • Massachusetts
  • New York
  • New Jersey
  • Pennsylvania
  • Michigan
  • Florida
  • Minnesota
  • North Dakota
  • Hawaii

But just because you live in a state where PIP is not mandatory does not mean you should ignore this optional coverage. It’s a fast and easy way to get quick cash if you get to an accident and the money that either insurance company owes you for your medical expenses gets caught up in red tape.

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Understanding How Fault Is Determined

In Legalese, negligence is just a fancy term for “this jerk caused the accident”. And if you are the one who caused the accident, then you and your insurance company are the jerks who are going to have to pay for the damages that result from that accident. But determining how much you have to pay varies based upon the type of legal negligence label that gets slapped onto your case.

Pure contributory negligence is an “All or Nothing” type of fault, basically. Unless the injured party can prove beyond a shadow of a doubt that they were 0% fault in causing an accident (or, conversely, if the other driver can prove that the injured party had even the tiniest sliver of blame in the collision happening), then said injured party won’t receive any payouts from the guilty driver’s liability insurance coverage. There are only five states that have pure contributory negligence laws: Alabama, Maryland, Virginia, North Carolina, and Washington DC. In these states, drivers who don’t add PIP coverage to their insurance policy, even if your state doesn’t mandate it, may find themselves with a significant financial hardship if they are injured in an accident where the blame is shared by both parties.

Pure comparative negligence laws are the fairest when determining which driver receives a financial award for damages, and also how much they receive. For example: if another driver hits you and they were deemed to be 80% at fault in the accident, they could still file a claim against your insurance company for 20% of their medical expenses and property damage (since you were legally 20% at fault). These funds would come from the liability coverage of your auto insurance policy. But pure comparative negligence laws only exist in the 12 no-fault states that we mentioned earlier in this article.

For the rest of the country, the odds are good that the laws in your state adhere to modified pure comparative negligence rules and regulations. These rules fall somewhere in the middle between pure comparative negligence and pure contributory negligence. Like the latter, if there is shared blame in an accident, both drivers have the opportunity to get damages paid out by the other driver’s liability coverage. However, there’s a threshold to how much fault qualifies them to file such a claim.

Usually, this threshold is somewhere close to a 50-50 split. This means that, in most states, if you were 20% at fault and the other driver was 80% at fault, then you will be paid out 80% of the financial damages resulting from your claim. On the other hand, if you were the driver who is found to be 80% at fault, you would be up a creek without a paddle because legally, you would not have to right to file a claim and recoup that 20% in damages from the other driver’s insurance company.

Obviously, the laws for determining fault are extremely complex. And, unfortunately, so are the rules which determine if and how much your premiums will increase post-accident. The more fault that’s attributed to you, the more likely your insurance premiums are to rise. Drivers who are less at fault may see a slight increase in their premiums, but obviously it will not be as much as if they were the one who caused the collision in the first place. No faults drivers may also see their rates go up, depending on where they live, local laws, and their insurance provider’s policies.

Average Auto Insurance Premiums by FaultLegend: Clean Driver At-Fault Driver Not-At-Fault Driver AlabamaWyomingCaliforniaOklahomaNevada 20406080100120140160180200$127$160$150$128$161$151$164$207$194$131$165$155$112$141$132

Circumstances Which Determine Fault in an Accident

Courts rely heavily on the police report and the testimony of eyewitnesses when determining fault in an accident. Although the testimony of the drivers and passengers involved in the collision is important, such testimony usually carries less weight because of how the trauma (and the desire to avoid being blamed for the accident) may influence a person’s recollection of what happened.

State laws may also help determine who was and was not at fault for a particular accident. For example, if you were making a left yield turn and another driver hit you while you were in the middle of the intersection, you would be found at fault for failure to yield to oncoming traffic. However, if the other driver was speeding, under the influence of drugs or alcohol, or running a red light, you could end up sharing the blame or even being found blameless. The same rules apply to rear-end collisions if the other driver’s actions somehow made it impossible for you to stop in time.

Average Insurance Premiums by FaultLegend: Clean Driver At-Fault Driver Not-At-Fault Driver ColoradoDelawareGeorgiaIndianaLouisiana 20406080100120140160180200220$130$164$153$132$166$156$183$231$216$100$126$118$164$207$194

If you’ve recently been in an accident, especially if you were deemed liable, your insurance rates are likely going to go up – and soon. But we can help you shop around and get a more affordable rate. All you have to do is enter your ZIP code on this page and use our FREE quote generator to get fast, accurate estimates from local car insurance companies. It couldn’t be simpler.

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