Declaring Not-At-Fault: When To Disclose To Your Insurance Company

Being involved in a car accident can be a stressful experience, and knowing how to handle the situation with insurance companies can be challenging. In most states, one party is usually considered at-fault and is responsible for covering the injuries and property damage of the other driver. However, determining fault can be complex, and there are varying rules across different states. This article will explore the steps to take when dealing with insurance companies, the differences between at-fault and no-fault states, and what to do if the at-fault driver does not comply.

Understanding 'at-fault' and 'no-fault' states

In the United States, there are three types of insurance laws related to fault in auto accidents: At-Fault-Based Systems and No-Fault Systems, with a third system, Choice No-Fault, offered in some states.

At-Fault-Based Systems

In at-fault systems, the driver who is determined to be responsible for the accident must compensate the other parties for damages and injuries. At-fault insurance laws typically involve determining fault through investigation and sometimes litigation. There are 38 at-fault states in the United States, plus the District of Columbia.

No-Fault Systems

In a no-fault system, each party’s insurance company pays for their own medical expenses and other losses, regardless of who caused the accident. No-fault insurance laws aim to reduce the time and costs associated with resolving car accidents. There are 12 no-fault states in the United States, although 3 of those are choice no-fault (i.e. Kentucky, New Jersey, and Pennsylvania). In no-fault states, drivers must purchase car insurance with personal injury protection (PIP) coverage to cover their own injuries in an accident.

Choice No-Fault Systems

In choice no-fault states, drivers can choose to operate their policy under the no-fault system or the traditional at-fault-based system. If no option is selected, the default is at-fault in Pennsylvania and no-fault in Kentucky and New Jersey.

At-Fault vs No-Fault

Whether you live in an at-fault or no-fault state significantly affects your ability to make a personal injury claim. In at-fault states, you may pursue compensation by filing a claim against the at-fault driver’s insurance or by suing the driver directly for expenses that exceed your own insurance coverage. In no-fault states, your ability to sue for personal injury is generally restricted; you can typically only step outside the no-fault system if the injuries meet a certain severity threshold.

What to do at the scene of an accident

Being involved in a car accident can be a stressful experience, but it's important to keep a clear head and take the right steps to ensure that you can file a claim with your insurance company or the other driver's insurance company. Here's what you should do at the scene of an accident:

First and foremost, if anyone involved in the accident has been injured, call 911 immediately. Even if there are no apparent injuries, it is generally a good idea to call the police and get a police report. This creates an official record of the incident, which can be valuable when filing an insurance claim. Additionally, in some cases, notification to the police within a specified time period is required, especially in the case of a hit-and-run accident.

Once you have ensured everyone's safety, start gathering information and evidence. Exchange names, addresses, telephone numbers, driver's license numbers, and license plate numbers with all drivers involved. It is also important to obtain vehicle registration information and, if possible, take photographs of the damage to all vehicles and the accident scene. If there are any witnesses, get their contact information as well. This documentation will be crucial when filing an insurance claim.

If the other driver does not have an insurance card, ask for their insurance company's name and policy number. You should also give them your insurance information. It is important to be cooperative and provide the necessary information, but do not sign any statements regarding fault or promises to pay for damages.

In some cases, the situation may be clear-cut, and one party admits fault. In that case, the at-fault driver's insurance should cover any property damage, medical bills, and, in some instances, compensation for other damages. However, if the other driver does not admit fault or is uncooperative, you may need to involve your insurance company, and they will work with the other driver's insurance company to resolve the claim.

If you are dealing with an uncooperative or uninsured driver, you may need to explore other options, such as filing a claim with your own insurance company or seeking legal assistance. Remember, your safety and well-being are the top priorities, and it is always a good idea to carefully review your insurance policy and understand your options before making any decisions.

Dealing with the other driver's insurance company

At the Accident Scene:

It is important to gather the necessary information at the scene of the accident. Take a picture of the other driver's insurance card and driver's license. If they don't have an insurance card, make sure to get their name, phone number, insurance company name, and policy number. Also, remember to give them your information. If the police are involved, get a copy of the police report, as it can be valuable when filing an insurance claim.

Filing a Claim:

When you get home, file a claim with the other driver's insurance company. Let your insurance company know about the incident as well. Their insurance company should cover your car repairs, medical bills, and even a rental car, if applicable. Remember that you may need to provide documentation related to your claimed losses, such as medical bills and lost income.

Dealing with Uncooperative Drivers:

If the other driver is uncooperative and fails to contact their insurance company, this could lead to them being considered uninsured for the accident. In such cases, you may need to notify the relevant state authorities, as there can be consequences for an uninsured driver. Additionally, if the other driver's insurance company denies coverage due to their policyholder's lack of cooperation, your insurance company might step in and deal with the situation.

When the Other Insurance Company Refuses to Pay:

If the other driver's insurance company refuses to pay, ask for a detailed and written explanation of their decision. You can then file a complaint against the insurance company, and they are obligated to respond in writing, explaining their reasons for denying your claim. If they still refuse to pay, you may need to consider legal options or file a claim with your own insurance company, especially if you have collision coverage or uninsured/underinsured motorist coverage.

Communicating with the Other Insurance Company:

When communicating with the other insurance company, be cautious about what you say. You are typically not legally obligated to talk to them, but if you do, cooperate to some extent to get a fair result. Avoid giving written or recorded statements, as they can potentially be used against you. Remember that the insurance adjuster represents the company's interests, not yours, so be prepared for pushback on certain issues.

When to file a claim with your own insurance company

When you are involved in a car accident, one of the first things you need to do is file an insurance claim. Even if another driver caused the damage, you have the option to file a claim with your own insurance company, provided you have the appropriate coverage. This is known as a "first-party" claim, and it is different from a "third-party" claim, which is filed with the other driver's insurance company.

In a first-party claim, you have a direct contract with your insurance company, which is required to fulfil all the conditions stated in your policy. On the other hand, in a third-party claim, you do not have a direct contract with the other driver's insurance company, and their primary obligation is to their own policyholder. Therefore, if the other insurance company denies your claim or you disagree with their offer, you can file a claim under your own policy.

If you have collision coverage, it will pay for your repair costs. If you have uninsured or underinsured motorist coverage, it will cover the costs if the at-fault driver does not have insurance or has insufficient insurance to pay for your car repairs. Additionally, if you have medical bills, your personal injury protection coverage, medical payments coverage, or uninsured/underinsured motorist coverage may pay for them.

When filing a claim with your own insurance company, it is important to cooperate with their investigation and provide all the necessary information. This may include a copy of any legal documents, a sworn proof of loss describing the date of loss and how it happened, medical and auto repair bills, a copy of the police report, and other relevant documents. Keep in mind that your insurance company may ask for multiple repair estimates, and there may be storage fees if your vehicle is undriveable and towed to a storage facility.

What to do if the at-fault driver does not comply

If you are in an accident that is not your fault, there are a few steps you should take to ensure that the at-fault driver's insurance covers the costs of any damage to your vehicle and property, as well as any medical bills. Firstly, at the scene of the accident, you should take a picture of the other driver's insurance card and driver's license. If they do not have an insurance card, be sure to ask for their name, phone number, insurance company name, and policy number. You should also give them your information. If the police are called to the scene, be sure to get a copy of their report.

Once you have this information, you can file a claim with the other driver's insurance company, and let your own insurance company know about the incident. The at-fault driver's insurance company should then cover your car repairs, medical bills, and even a rental car, if needed. However, what happens if the at-fault driver does not comply?

If the at-fault driver is non-responsive or uncooperative, the insurance company may deny the claim. In this case, you can file a complaint with the help of TDI, who can assist with complaints against insurance companies. If the insurance company is still unwilling to pay, your next step is to seek legal help. You can also file in small claims court against the insured/at-fault party directly, which will usually initiate a response from the insured or insurer, and it will usually be settled without needing to go to court.

If the at-fault driver's insurance company does eventually pay out, your insurance company may try to recover what they paid you from the other driver's insurance. If they are successful, you may get your deductible reimbursed.

It is important to note that some states operate under a no-fault system, where injuries suffered in an accident are covered by each driver's own personal injury protection coverage, rather than the at-fault driver's insurance. In these cases, fault may not need to be determined for bodily injury claims, and each driver's insurance covers their own medical bills and/or wage loss, regardless of who caused the accident. However, no-fault states may allow drivers who suffer severe injuries to sue the at-fault driver if certain conditions are met.

Frequently asked questions