How Does Car Insurance Work When You Are at Fault?

If you're at fault in a car accident, your insurance company should spring into action to manage the claim for the other driver's damages. This involves investigating the accident, determining the extent of the damage and negotiating a fair settlement with the other party or their insurer. However, state laws will impact at-fault findings and who will ultimately pay for damages.

If you're found "at fault" after a car accident, you're legally responsible for causing it. This isn't decided randomly — police officers, insurance adjusters or courts consider factors like negligence, traffic laws and relevant evidence.

If you're at fault, your car insurance is supposed to step in and help cover the costs of the damage you caused to the other driver and their car. This is where your liability coverage comes into play. It can help pay for things like fixing or replacing the other driver’s car, medical bills or lost wages.

Sometimes, accidents aren't black and white. Both drivers might share some of the blame. This is "comparative negligence," meaning each driver is responsible for a portion of the damages.

How your car insurance handles an at-fault accident will depend on your location and whether your state follows an at-fault or no-fault system. Assuming you’re at fault in an accident:

Even if you're at fault, you don't have to worry about your own car repairs if you have collision coverage. This optional coverage is especially useful if you have a new or valuable car. It usually kicks in after you pay your car insurance deductible.

When you are at fault in an accident, your insurance company handles the claim for the other driver's damages through your liability coverage. Here's how the process typically works:

Determining fault after a car accident isn't always a simple matter of "who hit whom." It involves a legal assessment of who was responsible for causing the collision. This could involve the police, insurance companies or even the courts if things get complicated.

Who's at fault ultimately impacts who is responsible for damages.

Each state has rules for deciding who's at fault in an accident. These are referred to as "negligence laws." Here's a quick look at the main types and states following these guidelines.

Contributory negligence is the strictest type. Only a handful of states follow these guidelines. In these cases, if you're found even partially at fault for a car accident (even 1%), you can't recover any damages from the other driver.

In the states that follow pure comparative negligence guidelines, you can recover damages no matter how much you were at fault for a car accident, but your award will be reduced accordingly. For example, if you're 90% at fault, you can only recover 10% of your damages.

Modified comparative negligence is the most common guideline for negligence laws. This means you can only recover damages if your fault for a car accident is below a certain threshold, usually 50% or 51%. You can't recover anything if you're at or above that threshold.

South Dakota follows a unique hybrid of comparative and contributory negligence known as the "slight/gross negligence comparative" guideline. This means you can only recover damages if your fault is considered "slight" compared to the other driver's "gross" negligence, making it more difficult to receive compensation.

If you're found at fault in an accident, it's not just your car that takes a hit — your insurance rates can, too. Here's how it usually plays out:

Typically, an at-fault accident stays on your driving record for three to five years. During that time, you'll likely be paying higher rates.

Accidents happen, and it's natural to have questions about how your insurance works if you're responsible. Here are answers to some common questions you might have about the process.