Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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Here's what you need to know...

  • When you have a covered loss, you can file a claim for benefits against your own auto insurance policy or against the other party
  • When a claim is being investigated, the insurance adjuster will investigate the details of the loss to determine which party caused the accident and how much fault each party should be assigned
  • You’re found to be at fault in a loss when you’re at least 51 percent to blame for the events that lead to the accident
  • If you’re in an at-fault accident, the accident will be on your  claims record and can affect your future insurance rates

When you file a claim, the auto insurance company will spend a great deal of time and resources investigating it. In fact, part of your auto insurance contract says that the insurer is responsible for paying all of the expenses that are incurred to investigate and settle a claim.

The purpose of claim investigation is to determine who’s at fault for the loss and which insurance carrier will be paying out a settlement.

Allocation of fault doesn’t only have an effect on the insurance company, it can affect whether or not you’re eligible for insurance for years.

Looking to switch companies? Enter your ZIP on this page to compare auto insurance quotes!

Table of Contents

What is a first-party claim?

There are two different types of auto insurance claim that you can file after an accident. These two types of claims are called first-party and third-party claims.

There will be times when a first-party claim is classified as an at-fault loss.

When you file a first-party claim, you’re filing a claim against your own auto insurance policy.

You must carry the appropriate coverage options so that your policy will approve the claim and pay out the benefits.

Some of these coverage options include Medical Payments, Uninsured Motorist, Comprehensive, and Collision.

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What is a third-party claim?

When you file a claim against the other party’s insurance, it’s called a third-party auto insurance claim.

You can still contact your own company’s claims department to file a third-party claim and your adjuster will deal with the other company for you.

In order to make a claim for benefits against the driver’s insurance, the other driver must be to blame.

You can file a claim for the following benefits:

  • Bodily Injury Liability
  • Property Damage Liability
  • Expenses incurred to rent a car, tow the car or keep the vehicle in storage

What does the allocation of fault mean?

When you first make your claim, the insurance company will take basic information from you to set up your claim and assign the claim to a specialist.

After the adjuster receives the information and records statements from each driver and witnesses who saw the accident, the adjuster will be equipped with the information needed to allocate fault.

Fault allocation is part of the claims process.

The adjuster will work back and forth with other insurance companies until both carriers agree which driver is primarily to blame.

If the carriers can’t agree, the claims process can be delayed until a final determination can be made.

When is an accident classified as at-fault?

In most cases, you have to be at least 51 percent to blame for the events leading up to the accident for the accident to be at-fault.

If you are 30 percent to blame for an accident and the other driver is 70 percent to blame, the accident will still be classified as a non-fault loss even though your actions contributed to the crash.

By not being classified as the at-fault driver, your auto insurance rates won’t be affected.

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Can being partially at fault affect your payout?

If you’re less than 50 percent at fault for an accident, there’s a chance that the fault that was allocated to you could affect your claims payout.

In states that have a comparative negligence law in place, drivers pay for contributing to the cause of an accident.

In these cases, if you’re 25 percent to blame, the other party’s insurance will only pay for 75 percent of your damages.

What happens to your rates when you’re in an at-fault accident?

When the policy is about to be evaluated at the renewal, the insurer will look at your claims record and your driving record to determine if you’re still eligible for auto insurance coverage.

If you have multiple accidents or a combination of convictions and accident, the company can non-renew your insurance.

This means the company won’t send you an offer to extend your coverage past the expiration date.

If you can keep your coverage through the insurer, the insurer will surcharge your rates for having an accident and being a riskier driver.

You want to avoid having an at-fault claim at all costs, but if you have a loss it’s nice to know that you have a policy safeguarding you.

If you’re paying too much for your coverage, you should take the time to shop around.

It’s best to wait until your claim has been closed before you switch carriers. After the claim is settled, start to shop around using an online rate comparison tool. This will give you access to instant quotes in just a few minutes.

Scroll to the bottom of this page and enter your ZIP code to get FREE quotes today!

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