Who Pays When a Car Accident Is Not Your Fault?

When someone else causes a crash, it feels obvious that they should pay. In practice the money comes from insurance, and which policy pays first depends on where you live and what coverage everyone carries.

At-fault (tort) states

Most states follow a fault system. The driver who caused the crash is legally responsible for the damage, and their liability insurance pays the other people's losses up to the policy limits. You can file a "third-party" claim with the other driver's insurer for:

• Vehicle repairs or the value of a totaled car
• A rental car while yours is being fixed
• Medical bills and future treatment
• Lost wages
• Pain and suffering

If the insurer accepts liability, it negotiates a settlement with you. If it disputes fault or offers too little, you can sue the driver before your state's statute of limitations runs out.

No-fault states

About a dozen states use a no-fault system for injuries. Each driver's own personal injury protection (PIP) pays their medical bills and part of lost wages, regardless of who caused the crash (Progressive, Bankrate). You can step outside no-fault and sue the at-fault driver only if your injury meets the state's threshold, which is either a dollar amount of medical bills or a "serious injury" definition. No-fault rules usually cover injuries only; damage to your car is still claimed against the at-fault driver's property damage liability coverage.

Using your own policy first

Even when the other driver is clearly at fault, it can be faster to use your own coverage:

• Collision coverage fixes your car now, minus your deductible. Your insurer then pursues the other driver's insurer (subrogation) and, if it recovers, usually reimburses your deductible.
• MedPay pays medical bills up to a small limit regardless of fault.
• Uninsured/underinsured motorist (UM/UIM) coverage pays when the at-fault driver has no insurance, too little insurance, or cannot be found. See what happens if an uninsured driver hits you.

When fault is shared

If you were partly to blame, your state's comparative negligence rule applies. In pure comparative fault states your recovery is reduced by your percentage of fault; in modified states you recover nothing once your share reaches 50% or 51%; and a handful of jurisdictions still bar recovery if you were even slightly at fault (Cornell LII). Check your state's rule under state laws.

What to do now

1. Report the crash to your own insurer and open a claim with the other driver's insurer.
2. Keep every bill, estimate and receipt.
3. Do not accept a settlement or sign a release until your medical treatment is finished.
4. If the insurer denies fault or your injuries are significant, talk to a personal injury lawyer. See also what to do after a car accident.

Sources

1. Progressive: At-fault vs. no-fault accidents
2. Bankrate: Fault vs. no-fault accidents
3. Cornell Law School LII: Comparative negligence
4. Cornell Law School LII: Negligence