Liability: The Myth of No-Fault Accidents
What No-Fault Isn't
The most common misunderstanding I came across when speaking to drivers recently involved in an accident was regarding "no-fault." A lot of people have been led to believe that if you reside in a no-fault state, that means that no one is at fault for an accident. But that could not be further from the truth.
If you reside in a no-fault state, like myself, you can still be at fault for an accident. No-fault simply refers to a type of coverage associated with personal injuries. Essentially, your state requires that you carry this no-fault insurance so that if you are injured in an accident, your auto policy can start paying your medical bills for you right away, as any potential bodily injury claim will take much longer before it can be settled. This coverage protects you financially from the burden of paying medical costs associated with your accident.
Not all states require this coverage, and it goes by various names, including Personal Injury Protection (PIP) and Medical Payments Coverage (MedPay). It is often referred to as no-fault simply because it does not matter who is at fault for an accident, your own insurance policy will be the primary payer of any accident related medical expenses.
So Who's At Fault?
If you were one of the many led to believe that you live in a state that doesn't assign fault, you may be wondering who is actually at fault for an accident after all. This can be complex, but there are some basic tools that your liability adjuster may use to make a determination.
- Rules of the Road: Remember that little booklet that the DMV gave you when you were getting ready to get your learner's permit filled with the rules of the road? Your insurance company still uses them! They may not be physically using the book, but most of the time your liability adjuster is applying the rules of the road to your accident. These rules are often tied to actual state statute, and guide what you can or cannot do. For example, some states allow you to pass on the right in very particular circumstances, while others do not. It's your liability adjuster's job to know these statutes and rules and decide if you violated them or not. If you didn't follow one of these rules, you may hold some or all of the liability when it comes to your accident.
- Prudent Man Theory: This theory is taught to all new liability adjusters to help them determine fault. Basically, it forces an adjuster to think what a prudent, reasonable person would have done in the circumstances of an accident. Although this doesn't necessarily determine who is liable, it helps adjusters to understand what a driver could have done and did or did not do to avoid the accident. For example, if someone were to pull out in front of you at the last minute, would you brake and sound your horn? Do nothing? Speed up? Swerve? A prudent person would obviously take steps to avoid the other person, even if it were too late.
- The Police: The police will often come to the scene of an accident and take a report. They may even issue citations to drivers. Although these reports and citations can help your liability adjuster determine who is at fault, it is not the only factor when determining liability. Remember, most of the time the officer didn't see the accident. He is only writing a report about what he found upon arrival to the scene, what was said by the drivers and any witnesses, and perhaps why he cited a driver. Your adjuster will have the final say in determining liability, regardless of what the officer on scene may have said to you.
- Witnesses/Video Footage: Witnesses are important factors in determining liability. They often had a good viewpoint and were able to see what each driver did in the moments leading up to the collision. The ideal witness will be an unknown party to the involved drivers. Passengers, friends, and family are not considered reliable witnesses. The ideal witness will have actually witnessed the collision, not just heard it or stumbled upon the scene immediately after the accident. If a driver says they saw what happened and is willing to provide their information, be sure to get it. Witness statements can be the determining factor in a liability dispute. Video footage is also incredibly helpful. Although difficult to get footage from businesses or traffic cameras, more and more drivers are using dash cams. I cannot tell you how many times I received dash cam footage that completely changed a liability decision. If you can afford one, I would always recommend getting one.
Determining liability can be a complex process and often times you may find that your insurance carrier and the other insurance carrier do not agree on liability. We will discuss that next. But for now, know that there are many factors for your adjuster to consider when making a decision, and both drivers may end up holding some percentage of the fault.
If your adjuster tells you that there is a liability dispute, that usually means one of two things. Either the other party is giving a conflicting version of events to the one you gave, or the carriers themselves cannot agree on how much fault is on their insured.
Word-Versus-Word: This is where it is possible to have what you could call a "no-fault" scenario. Both carries may agree that, due to the lack of evidence to support either version of events, the accident is word-versus-word. This means that both insurers will put 0% of the liability on their driver, and that their driver will have to file through their own coverage with no potential to be reimbursed via the other insurance company. This doesn't mean no one is at fault, but rather that there isn't enough evidence to support a certain version of events over another. This is why it's always good to have a dash cam!
Carrier Disputes: Sometimes, insurance carriers can't agree on liability. Not all accidents result in a driver being 100% at fault. Sometimes, liability is shared between both drivers. So how do adjusters determine that percentage? It's a bit objective, but usually it's based on what a person did or did not do leading up to the loss. For example, if someone turns left in front of you and you hit them on the quarter panel because you didn't try to avoid them, you hold some liability for having done nothing to avoid the other party. Of course, the person turning is the one most at fault, but you contributed to the loss by doing nothing. Insurers will often attempt to negotiate with each other to resolve these disputes. If they cannot, they will normally encourage their insured to file under their own policy and will then take the claim to arbitration to be heard by a neutral third party (usually another insurance carrier) later on.
How Can I Help My Adjuster?
Liability investigations and assigning fault to a party is a complex process. Each claim is handled on its own merits, so who is at fault is going to be determined based on each unique fact. As an insured, you can do some simple things to help your adjuster.
- Call you insurer as soon as possible and provide a detailed description of what happened. Your adjuster may ask you to give a recorded statement where they ask you additional questions. Be as detailed as possible when describing the loss to your adjuster.
- You can get the police report, if applicable, and send it to your adjuster as soon as possible. Most insurance companies have to get reports through a third party vendor, and it can delay your claim if they have to wait.
- Provide accurate information on the other party and any witnesses. This will help your adjuster contact the other party and their insurance company, as well as get any witness statements.
- Be honest. Even if you know you probably are at fault, take ownership of your actions. You might think being dishonest may help keep your rates lower, but you are hurting someone else by deceiving your adjuster. If the roles were reversed, how would you want the other person to handle the situation? Besides, there is nothing more embarrassing than getting a call from your adjuster telling you that there is dash cam footage and it shows that the version of events you gave were inaccurate.
Overall, be understanding that the outcome of the investigation may not be what you expected. Understand that the liability adjusters can only make decisions off of what was provided to them, and are trained to do the job daily. They will do what is best for you, the insured, even if it may not seem that that is the case to you. If you truly feel that a claim was handled in bad faith, you can make a formal complaint to your state's Insurance Commissioner.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.