Comparative Negligence Laws In Car Insurance Claims – Forbes Advisor


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The first thing you likely think about right after a car accident is whether anyone was injured. If you’re lucky and no one was hurt badly, you’re then probably wondering how much damage the cars sustained—and who is at fault. The saying “there’s plenty enough blame to go around” sums up the concept of comparative negligence laws for auto insurance claims.

In 2020, property damage, injuries and deaths from auto accidents cost around $474 billion, according to National Safety Council estimates. With claim costs adding up to billions of dollars, deciding fault after a car crash is critical to insurance companies. As a driver, it’s also important to understand how fault is determined, since it affects both the amount of money you may have to pay and the amount you may receive after an accident.

Determining who is at fault in an accident is partially based on state negligence laws. These laws dictate how fault can be divided after an auto accident and to what degree, if any, you can be compensated by the other driver for damages.

 

What Are Comparative Negligence Laws for Car Accidents?

Comparative negligence laws establish how the responsibility for an accident should be split when two or more drivers are involved. The extent to which you’re negligent determines whether you will receive compensation for damages and how much.

Claim payouts can be divided up proportionally based on the drivers’ negligent actions. That means each driver involved could potentially seek payment for damages from the other driver’s insurance company.

Why should you care about negligence laws? They affect your ability to make a claim and the payout amount you can receive from the other party and their insurance.

If you’re partially responsible, it can be taken into account if you’re filing a claim with the other driver’s insurance company. That is called a third-party car insurance claim.

If you file a claim with your own insurance coverage, such as a collision insurance claim, it’s a first-party claim, and the negligence laws don’t apply.

Types of Comparative Negligence

There are two main types of comparative negligence: pure comparative negligence and modified comparative negligence. Slight-gross comparative negligence is a rare third type applied only in one state, South Dakota.

Your state’s negligence law determines if and how much you may collect when filing an accident claim against the other party.

Pure Comparative Negligence Law

A pure comparative negligence law permits both drivers in an accident to seek compensation for damages. It allows this regardless of your share of the fault. That means you could file a claim even if you’re found to be 99% responsible for the accident. However, pure comparative negligence reduces your settlement by your degree of fault.

For example, if you are 99% responsible, your settlement amount is reduced by 99%.

In a nutshell, everyone is held responsible for their percentage of fault and can file a claim for the portion they aren’t culpable for with the other party’s insurance company.

Here are 12 states that have pure comparative negligence laws:

  • Alaska
  • Arizona
  • California
  • Florida
  • Kentucky
  • Louisiana
  • Mississippi
  • Missouri
  • New Mexico
  • New York
  • Rhode Island
  • Washington

Modified Comparative Negligence

A modified comparative negligence law allows you to collect from the other driver but only if your degree of fault is under a certain threshold. While pure comparative negligence lets you make a claim if you’re up to 99% at fault, modified comparative does not.

There are two threshold rules used: a 50% rule and a 51% rule.

With a 50% threshold rule, you cannot collect if you’re 50% or more responsible. If your fault is equal to or greater than the other driver, you’re out of luck if you want to file a claim against the other driver’s insurance company. There are 10 states with modified comparative negligence 50% rule.

50% rule modified comparative negligence states:

  • Arkansas
  • Colorado
  • Georgia
  • Idaho
  • Kansas
  • Maine
  • Nebraska
  • North Dakota
  • Tennessee
  • Utah

A 51% threshold rule is similar, but you can still collect from the other party if you’re up to 50% at fault. It’s when you hit the 51% barrier that you no longer can seek compensation that way. There are 23 states with modified comparative negligence laws that follow the 51% rule.

51% rule modified comparative negligence states:

  • Connecticut
  • Delaware
  • Hawaii
  • Illinois
  • Indiana
  • Iowa
  • Massachusetts
  • Michigan
  • Minnesota
  • Montana
  • Nevada
  • New Hampshire
  • New Jersey
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • South Carolina
  • Texas
  • Vermont
  • West Virginia
  • Wisconsin
  • Wyoming

Slight-Gross Comparative Negligence

South Dakota is the only state that has the slight-gross negligence law. It’s not as definitive as the pure or modified comparative negligence laws as there aren’t precise definitions for “slight” or “gross” in the law.

Under South Dakota’s law, you can recover compensation by filing a claim with the other driver’s insurance company only if your negligence is “slight” (very minor), compared to the other driver whose negligence is “gross” (major). If there isn’t a significant difference in fault, then you’re unable to recover damages from the other motorist.

For instance, let’s say you back up and hit a car double-parked on the street. The other party may be slightly at fault for parking there momentarily. Still, you’re grossly negligent as the driver of the moving vehicle who didn’t fully notice your surroundings.

You’re unable to file a claim against the other driver in this scenario. However, your insurance company could compensate the other driver for their damages minus their percentage of fault.

How Does Comparative Negligence Affect Car Insurance Claims?

For pure comparative negligence, you can claim and collect from the other driver’s insurance company as long as you’re not held 100% responsible for the accident.

For example, say you’re a New York driver and run a stop sign. The other driver saw you coming but continued anyway. You’re primarily at fault, so the insurance companies find you 80% at fault. The other driver didn’t avoid the accident, so is found to be 20% responsible.

In this hypothetical scenario:

  • You can collect from the other driver’s insurance for 20% of your damages (100% minus your 80% share of fault is 20%).
  • If the cost to repair your car is $3,000, you’d receive $600.
  • The other driver could file a claim against your insurance company for 80% of their damages. (100% minus their 20% share of fault is 80%).
  • If the cost to repair the other driver’s car is $3,000, the other driver would receive $2,400.

If injured, each driver would first claim under their personal injury protection (PIP) coverage that New York car insurance requires, regardless of fault.

Here’s another example. Suppose you are driving on the California freeway, looking at your phone, don’t notice traffic has stopped and hit the car in front of you. You’re found fully at fault for the accident as a distracted driver.

In this case, you’d be responsible for 100% of the other driver’s damages, and they would be responsible for 0% of yours. If you have collision insurance, which pays for damage to your car regardless of fault, you can file a collision claim with your own insurer. It would pay for your damages up to your limits, minus your deductible.

Under the modified comparative negligence 50% rule, you can collect as long as you aren’t equally responsible or more than the other driver. That means if found 50% or greater at fault, you cannot collect from the other driver’s insurance company.

As an example, you live in Colorado, and you and another car went for the same lane at the same time on the highway. You’re both found 50% at fault, so neither would receive reimbursement from the other’s insurance company. Instead, each would need to make a collision claim with their own insurance company for damages.

However, suppose you had your signal on and the other driver didn’t, so the insurance companies decided you were found 45% responsible, and the other driver was found to be 55% at fault. In that case, you could file a claim against the other driver’s insurance company. Your percentage of the fault reduces your compensation, so you’d receive only 55% of your damages. If your loss is $5,000, you’d receive $2,750.

For the modified comparative negligence 51% rule, you cannot seek compensation from the other party if your fault is greater than the other driver’s. It differs from the 50% rule because under that rule, if both drivers are 50% at fault, they can claim against the other party.

For example, you’re a Texas driver speeding down a road when a car abruptly pulls out in front of you. It suddenly slows down but doesn’t have working brake lights. Because of your high rate of speed, you’re unable to stop in time and hit the back of the vehicle.

The other driver is found 51% at fault due to the sudden maneuver onto the roadway and having broken brake lights. The other driver can’t make a claim against your insurance because their fault is more than half, at 51%. You’re found 49% at fault due to speeding, so you can file a claim against the other party. Your damages are reduced by 49%, meaning if the damage is $3,000, you’ll receive $1,530.

How Is Fault Decided After a Car Accident?

Insurance companies typically have the final say on fault because they are the ones paying out the claims. But a lot of other variables are involved in their determination of negligence and fault.

First, police may contribute. Typically the police will ticket for infractions discovered—such as a driver who ran a red light—and write up statements and notes on the incident.

In some cities, law enforcement only responds to serious accidents with injuries or hit-and-run accidents. If that is the case, your insurance company won’t hold the lack of a police report against you. (But make sure if the state requires you to file a driver’s accident report that you do in the necessary time.) At the accident scene, you and the other driver will need to exchange information, including insurance information.

While a police report is nice to have, insurance companies do an investigation once claims have been made and don’t always agree with the findings of the police officer.

Insurance companies talk to drivers and witnesses, look at damaged vehicles and review motor vehicle laws. They may also do a scene investigation to look at the roadway where the accident occurred.

To help the claim progress, you can share photos, videos or dash camera footage showing how the accident unfolded or the aftermath.

After reviewing the evidence, the insurance companies will decide on the percentage of fault each driver possesses and payout claims according to the negligence laws. In the end, the insurance companies make the final finding of fault unless it ends up in court. In that case, a judge or jury would decide.

Explaining Terms Related to Finding Fault in Auto Accidents

Here are some terms that are good to know in case the insurance company uses them when determining fault:

  • Reasonable and prudent: Speaks to what an average attentive driver would do in a situation. Were you acting rationally and cautiously with your actions before or as the accident occurred? Perhaps not if you were trying to beat someone into a lane or risking the yellow light turning red as you sped through it.
  • Duty and breach of duty: A driver’s duty is how they should or should not act. For instance, you must pay attention to the road. Taking your attention away from your driving by texting is a breach of duty.
  • Greater duty of care: More obligation falls on you in some situations. For instance, as a motorist, you have a greater duty to be careful around bicyclists and pedestrians since you can inflict more damage.
  • Proximate cause: The action—or failure to take action—by a driver that was the leading cause of the accident, such as not stopping at a red light.
  • Last clear chance: If there is something you could do to avoid the accident, you should. For example, to prevent an accident, wait longer at a four-way stop sign, even when it’s your turn to go, if someone else isn’t stopping. You may be partially responsible if you had the time and opportunity but failed to take evasive action to avoid an accident.

Actions that may get you in trouble under some of these terms can include failing to:

  • Honk your horn
  • Apply your brakes
  • Avoid another vehicle

If you could have swerved or made an effort to dodge an accident but didn’t, you may be found partially liable for an accident. Insurance companies may view it as your failure to pay attention and react or failure to drive responsibly.

If you were acting as an attentive, reasonable driver and the insurance company disagrees, you can dispute their assumption. Having evidence, such as dash camera footage, may help sway them your way.

Comparative Negligence Laws FAQs

Do my car insurance rates go up after an auto accident?

Yes, your rates could rise after an at-fault accident.

States laws and insurance companies guidelines vary, but generally, you have to be primarily at fault for an accident to affect your rates. For instance, California car insurance rates can go up if you’re at least 51% at fault, even though it is a pure comparative negligence state.

In New York, an at-fault driver receives a surcharge (raised rates) if the incident resulted in injuries, death or property damage over $2,000.

Forbes Advisor’s analysis found car insurance rates after an accident for at-fault drivers go up 41% on average.

How Does Contributory Negligence Compare to Comparative Negligence?

Comparative negligence allows drivers who may bear partial fault to still recover damages from the other party. Contributory negligence is more limiting and doesn’t allow a driver to be compensated by the other driver’s insurance company if found even 1% at fault.

The District of Columbia and four states follow contributory negligence laws:

  • Alabama
  • Maryland
  • North Carolina
  • Virginia

In these states, if a driver contributed to the accident in any way, they can’t claim against the other party.
For example, if two cars back up in a parking lot into each other, each contributed to the incident. That means each would be unable to recover from the other party in a contributory negligence state.

Instead, suppose the accident occurred in a comparative negligence state. In that case, one or both drivers may be able to claim with the other driver’s insurance company.

For instance, if one driver was much farther out of the parking spot and found only 30% at fault, that driver could claim for the 70% they weren’t at fault. The other driver may claim in a pure comparative negligence state for the 30% they weren’t at fault but couldn’t in states with a 50% or 51% rule.

What if I Disagree with the Finding of Fault After an Accident?

You can first discuss your issues with the insurance claims adjuster. That is usually your point person with the insurance company. Next, there may be an appeals process with the insurance company to try and settle the issue if you otherwise cannot get your issues resolved.

If you are still at an impasse after the appeal, check with your state’s department of insurance (DOI) to see if they will review the disputed claim. DOIs in some states will review such issues to ensure the insurance company conducts a proper investigation and resolution.

If a settlement still cannot be reached, the subsequent step could be to file a lawsuit against the other party. Going this route, a judge or jury would make the final determination of fault and potential settlement.

An alternative option is to see if you can drop the claim with the other driver’s insurance and make a claim through your coverages. You would be paid for damages up to your limits but would owe any related coverage deductibles.

Your insurance company could then coordinate with the other insurance company for compensation if they find the other driver at fault (or partially at fault and can be compensated due to the negligence laws). If they find the other driver fully at fault, your insurance provider may be able to seek reimbursement of your deductible from the other party.



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