February 20, 2011

Fault And How Auto Insurance Companies Use It To Determine Payment

One thing to consider when looking at an auto insurance quote is how your insurer will deal with a claim. While no driver anticipates making a claim, chances are fairly good that at some point, you'll have to report anything from a minor fender bender to a major accident to your auto insurance company. Many drivers are left confused when this happens; they don't know what happens behind the scenes, how their claims are evaluated, or how payouts are decided. For instance, one important consideration is fault. When an insurance company decides fault, they effectively decide the fate of an auto insurance claim, so knowing how fault works in your state is very important.

After an accident involving multiple drivers, insurance companies need to decide fault in order to figure how much money each driver should pay. Fault is established by a special claims department in the auto insurance company, but the methods that they use aren't always scientific. They may look at evidence like pictures from an accident or compare the stories of each driver. They may also rely heavily on the reports of any police officers that were on the scene after the accident occurred. Many auto insurance companies will determine a percentage of fault for each driver, but this is an estimate–an auto insurance company might decide that one driver is 45% at fault, but the number may be arbitrary.

The trouble is that fault works differently depending on the laws in your state. In some states, each driver's insurance pays for the percentage of fault of that driver. A more common scenario is that a driver who is over 50% at fault will have to pay for the other driver's cost. However, there's still room for confusion; if both drivers are determined to be equally responsible, each driver may have to pay for the other's costs or each driver may be liable for his own costs, again depending on state law. Some states even have no fault laws, which keep cases from going to court by establishing that all drivers should pay for their own costs unless an accident is particularly large and costly.

If you're at fault in an accident, your auto insurance quote will rise. However, there are a few things that you can do to avoid this. You can protest the decision of your insurance company or you can take a driver education course to reduce the damage to your auto insurance rates. In any case, you'll stand a better chance of finding a low auto insurance quote if you know how fault works before you submit a claim due to an accident.