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If you're dealing with the aftermath of an auto accident, you may hear someone from your insurance company mention "comparative fault." It's a term that can make a big difference in the financial payout you receive from an insurance claim tied to the accident.
Comparative fault, also known as comparative negligence, assigns a share of the fault in an auto accident to each of the drivers involved. Read on to learn more about comparative fault, including how it's determined and how it affects a claim payout.
How Is Comparative Fault Determined?
Most states have laws that spell out comparative fault as it relates to auto accidents. Comparative fault refers to the amount of fault pinned on each person who contributed to causing an auto accident.
For instance, an insurer might assign 75% of the blame for an accident to one driver and 25% of the blame to the other driver in a two-car crash. In assigning fault, an insurer might determine that the primary cause of the accident was one of the drivers failing to hit the brakes at a stop sign. But the insurer also may conclude that the other driver was partially at fault because they were texting while driving. So, in this case, the driver who sped through the stop sign might be stuck with 75% of the fault and the texting driver is stuck with the remaining 25%.
Figuring Out Comparative Fault
An insurance adjuster typically figures out the fault percentages based on factors such as an accident report from a police officer, statements from the drivers and witnesses and a reconstruction of the accident scene.
If a crash-related lawsuit goes to trial, a judge or jury might end up weighing the comparative fault for an accident, too.
Why Is Comparative Fault Used?
Comparative fault helps settle how much of an insurance payout each party involved in a car accident will receive.
Using the previous example, the insurance company for the driver who's 75% at fault might cover up to 75% of the repair bills and medical expenses for the other driver, while the driver who's 25% at fault or their insurer might pick up the remaining 25% of the tab. This scenario involves what's called pure comparative fault.
In some cases, you might be entitled to financial compensation only if you're less than 50% or 51% at fault in an auto accident, depending on state laws. This is known as modified comparative fault.
How Else Is Fault Determined?
If you're someplace where neither comparative fault nor modified comparative fault is used, you might come across something called contributory fault. In this scenario, you can't recover any crash-related expenses from another driver's insurer if you're partly to blame (even just 1%) for the accident.
The five places with contributory negligence laws are Alabama; Washington, D.C.; Maryland; North Dakota and Virginia.
What Is No-Fault Insurance?
Some states have no-fault auto insurance laws on the books. In these states, every driver must file a claim with their own insurer following a crash, no matter who's at fault. In a no-fault state, every driver must buy personal injury protection (PIP) as part of their coverage. PIP covers medical expenses that arise from an auto accident.
How Does Fault Affect Your Insurance Payouts?
The level of fault in an auto accident can dramatically affect your insurance payout. Payouts differ based on the type of fault that's in play.
Pure Comparative Fault
In a state with a pure comparative fault law, the payout is split based on the amount of fault assigned to each driver involved in a two-car accident. So, if an insurer adjuster says the other driver was 65% at fault in an accident, you might be able to recover 65% of your repair and medical bills from that driver's insurance. Your insurance would cover the remaining 35%.
Modified Comparative Fault
Let's say you're in a state that has modified comparative fault and your case winds up in court.
In this situation, if a jury decides you were 49% at fault, you could be awarded 51% of the financial damages that you were seeking. But if jurors pin 51% of the blame on you, you'd end up with no financial damages at all because your percentage of fault is greater than the other driver's percentage of fault.
What if your accident occurs in a state with a contributory fault law? The circumstances could be far different than if a pure comparative fault or modified comparative fault law is in place.
For instance, if your case goes to court in a state with a contributory fault law and a judge decides you're even 1% responsible for an auto accident, you would not be eligible for a penny in financial damages.
How Can Auto Insurance Protect You?
Most states require drivers to carry liability insurance. This type of insurance covers injuries someone else suffers in an accident you caused or covers damage to someone else's property if you're at fault. You can add what's known as an umbrella policy to cover financial damages that exceed the limits of your liability policy.
Making Sure You've Got Sufficient Coverage
Before your auto insurance policy expires, you might want to review your coverage to make sure it would adequately cover an accident that's completely or partially your fault. If you realize your current coverage is inadequate, you may want to shop for a new auto insurance policy using Experian's insurance comparison tool.