Auto Insurance Center
Understanding Injury Settlements For Auto Accidents
Article 6 of 13 in What to Know Before Filing a Car Insurance Claim
After you file a car insurance claim to recover damages from a car insurance company, the company will make a car accident fault determination in accordance with your state law, and offer you an injury settlement. This process will closely examine your role in the accident to see if it was entirely, or partially, your fault. The car insurance company can deny your claim or present a settlement offer below what you think is fair using their internal assessment of your level of fault and the state's legal system.
TIP:Before you sign a car insurance settlement agreement, note that you can dispute an insurance company's assessment of fault. A good argument from an attorney can dictate how the law will settle a dispute over car accident fault, so know when to consult a car accident attorney. One can help when you want to dispute your settlement offer and level of fault.
Dividing Fault to Set an Auto Accident Settlement
Some states divide the fault between parties, and assign responsibility for paying for the accident based on the percent of damages each party has caused. This is known as comparative negligence, and there are two different variations of comparative negligence law across states:
- Pure Comparative Negligence (or the 100% Type): You can collect a percent of your total damages based on your level of fault. A pure comparative fault law allows the insurance company to subtract a percentage of the damages by determining what percent at fault you were. If you were 30% at fault, the insurance company will deduct 30% of the damages, and if you were 1% at fault then you will only get 99% of your damages. See the table below for more examples of how damages are distributed.
- Thirteen states recognize the pure comparative fault rule: Alaska, Arizona, California, Florida, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, New York, Rhode Island, South Dakota, and Washington.
- Modified Comparative Negligence (or the 51% Type or 50% Rule): the more widely used comparative negligence law allows the you to collect from the insurance carrier only if you are determined to be at fault less than a certain percentage. Thirty Three states recognize the modified comparative fault standard, and there are two different schools of thought.
- The 50 percent bar: you cannot recover if you are 50 percent or more at fault, but if you are 49 percent or less at fault, then you can recover. If you can recover, your payout is reduced by the percent of fault you are in the accident. Twelve states follow the 50% bar: Arkansas, Colorado, Georgia, Idaho, Kansas, Maine, Nebraska, North Dakota, Oklahoma, Tennessee, Utah, and West Virginia.
- The 51 percent bar: you cannot recover if you are 51 percent or more at fault, but can recover if you are 50 percent or less at fault. Again, the recovery would be reduced by your degree of fault. Twenty One states follow the 51% bar rule: Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Vermont, Wisconsin, and Wyoming.
TIP:Comparative negligence laws, particularly a pure comparative negligence law, can lead to some confusing cases of recovery depending on what percentage of fault each party is determined to be. See the below table for more examples,and consult an experienced car accident attorney with any questions about how your state will determine fault in a comparative negligence system.
When Fault Can Derail an Auto Accident Settlement
If you have an accident in one of the few states that still use what is known as the contributory negligence system you may not be able to recover anything from an insurance company if your negligence contributed to the cause of the car accident. The law of contributory negligence states that if you contributed to the accident, no matter how slight, you are barred from any compensation or recovery. This law is very strict, so it is critical that you show that you were not at fault. Currently, only five places recognize the pure contributory negligence: Alabama, Maryland, North Carolina, Virginia, and the District of Columbia
TIP:Because any finding of fault can prevent your recovery in a contributory negligence state, it may be harder for the insurance company or other party to prove you were responsible for the accident in any way. Attorneys can be critical to your case by helping you understand how your state determines fault and making sure you receive a fair fault assessment.
Example of How Fault Changes an Auto Accident Settlement
Bob, rushing to catch a light, runs the light after it has turned red. Betty, rushing to work, is speeding when she gets to the same intersection. The two cars collide, and Betty has a claim against Bob's insurance for $50,000 in damages. Because both Bob and Betty were in violation of traffic laws when the accident occurred, there is a question of fault that will impact how much, if any, Betty can recover. Look over the following table for Betty's recovery across contributory and comparative negligence jurisdictions for varying levels of Betty's fault:
|Type of Jurisdiction||0%||1%||10%||30%||49%||50%||51%||75%|
|Pure Comparative Negligence||$50,000||$49,500||$45,000||$35,000||$25,500||$25,000||$24,500||$12,500|
|Comparative Negligence: 50% Rule||$50,000||$49,500||$45,000||$35,000||$25,500||$0||$0||$0|
|Comparative Negligence: 51% Rule||$50,000||$49,500||$45,000||$35,000||$25,500||$25,000||$0||$0|
Disputing a Car Accident Fault Determination
As you can see car accident fault is very important to your recovery amount. As such, it will profit any insurance company to find you to be more at fault because the less they pay the more profitable they are. The insurance company will rely on state law to determine how they will use their fault assessment, but the fault assessment will be generated by their car accident claims adjusters. A car insurance company's car accident fault determination is the basis for their settlement offer, but it is not a legally binding resolution of the dispute. You are entitled to disagree with the car insurance company's fault assessment and get the amount of money owed to you based on your level of fault and the laws of your state. If you dispute the car accident determination, and would like to negotiate with the car insurance company or file a lawsuit to collect the damages you are owed, then you should consult an attorney prior to taking any action.
TIP: You can consult with an attorney at any time, even after you receive a settlement offer from the car insurance company. Car accident attorneys offer free consultations and many only charge fees on a contingency basis for money they get you. Click here to find an attorney in your state who can review your settlement offer, dispute it, and file a lawsuit.
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