How Does Auto Insurance Work If I'm At Fault in a Collision?
By Compuquotes Team on March 27th, 2008
If you have been involved in a motor vehicle collision and you are found at fault, your insurance will pay for the damages done to your vehicle and the other parties' vehicles or property.
In order for your vehicle to be covered for a collision, you must have collision insurance. If you do not have collision insurance on your policy, your vehicle will not be paid to be fixed, repaired or replaced.
If you do have collision insurance on your insurance policy, then that part of your policy will pay for the damage to be fixed or for your car to be replaced at fair market value.
Collision insurance, however, does not pay for someone else's property or vehicle to be fixed, repaired or replaced. Your liability insurance covers these costs, so you do not have to have collision insurance on your vehicle to be covered for someone else's property damage that has been ruled your fault. In most areas, including all of the United States and Canada, you are required to have a minimum amount of liability insurance on your vehicle.
If you are involved in a collision and are ruled at fault and the other driver has loss of use insurance, your liability insurance will also pay for the other person to have a vehicle while theirs is being repaired or replaced. If you have loss of use on your auto insurance. then that portion of your insurance would pay for you to have a rental car while yours is being fixed or replaced.
If you have no-fault insurance, then your insurance will pay out
the claim for your vehicle, regardless of who is at fault in the collision. Likewise, if the other person has no-fault insurance coverage, their insurance company would pay for the repairs to their vehicle even if you were found at fault in the collision.
If you are in a collision and it is ruled a 50/50 accident, that means you were both found equally at fault. In this case, your insurance company would pay to fix your vehicle while the other driver's insurance would pay to fix their vehicle. Again, it would be your collision insurance that would cover the damages to your vehicle, and if you don't have collision insurance, your insurance will not pay to repair or replace your vehicle.
The most important lesson you can learn is that the mandated liability requirements for auto insurance often aren't enough to cover you in the event of an accident. It is advisable that you take the highest level of liability insurance that you can afford. The most standard liability insurance to cover yourself is $1 million liability coverage, and while that seems like a lot of coverage, if you cause a major accident that results in bodily injury as well as property or vehicle damage, $1 million will barely cover the expenses.
Talk to your insurance agent about the coverage you have on your vehicle and ensure that it is sufficient coverage to cover you in the event of a collision or incident. You wouldn't want to be left responsible on a large claim and have no insurance to pay for it.