Which Type of Auto Insurance Covers you if at Fault in an Accident?
When we left last my wife’s car accident story, where she rear-ended another car, she had a number of questions. The biggest of which was, “will insurance cover repairs since I was at fault?”
Big, scary question. And it’s one that you should know the answer to BEFORE you get in an accident, not after (sorry, hun).
In her case, luckily, the answer was “yes”. In your case? It’s a bit more complicated.
This post was originally going to answer that question. I thought the answer would be universal (or at least standard in the United States), but the more I dug in, I found that each state handles auto insurance rules and regulations a bit differently. There are some general standards, but a number of little discrepancies. So I’ll cover the basics, but you will definitely want to check with your state’s DMV to be sure on specifics.
First, you must know that there are multiple types of coverage that you can add to your insurance policy – and you should know what each type of insurance means. Some are required (varies on a state-by-state level). Others are not.
Property Damage Liability:
Property damage liability is sometimes referred to as property protection insurance coverage. This is required as part of your state’s minimum liability coverage. It will pay for damage that you cause to property owned by someone else, including a parked vehicle, homes, fences, mailboxes, landscaping, etc.
In Michigan, property protection insurance coverage is no-fault (meaning it pays even if you are at fault for damage). In your state, that might vary.
Property protection insurance does not cover you in the event of an car-on-car accident, regardless of fault. If you want to extend your liability insurance further, you can do so with an umbrella insurance policy.
Bodily Injury Liability:
Bodily injury liability protects you from being sued by others, except in special circumstances, regardless of fault. It pays for medical expenses, lost wages, and pain and suffering for those you may have injured with your vehicle.
Bodily injury liability is required in most states.
Personal Injury Protection:
This auto insurance coverage pays the reasonable and necessary medical expenses (including rehab) for covered persons for treatment due to an auto accident.
Lost wages are often covered as well, if the injured person is not able to work.
Comprehensive insurance covers damage to an insureds vehicle in all cases not involving an accident with a vehicle, object, or a rollover. This could include a vandalism, theft, a hit animal, or natural events like hail, a fallen tree, fire, or flood.
A deductible is usually required on comprehensive insurance and it is often optional.
Collision insurance is the big one when it comes to car accidents and it covers vehicle-to-vehicle accidents, rollover, and accidents involving an object (i.e. hitting a tree).
If you want your insurance to cover repairs in one of these scenarios, you must have collision insurance. Collision insurance pays for the vehicle of the person insured. If the person that you collided with has collision insurance, it would not cover your repairs, even if they were at fault. And vice versa.
As far as I could find, collision insurance is optional in all states and in most cases, it requires a deductible be paid in the event it is used.
It’s usually the most expensive of all the types of auto insurance coverage.
Here’s where it gets a bit complicated.
In Michigan, there are multiple types of collision insurance, and what your insurance pays/does not pay impacts who pays, and if there is a deductible:
- limited collision: If you are 50% or more at fault, your insurance pays nothing. If less than 50% at fault, your insurance pays, minus deductible.
- standard collision: Your insurance pays, minus deductible, regardless of fault.
- broad collision: If you are 50% or more at fault, your insurance pays, minus deductible. If less than 50% at fault, your insurance pays everything, including deductible.
To answer my wife’s original “will insurance cover repairs since I was at fault?” question – the answer was “Yes, because you had broad collision insurance”. We had to pay a $500 collision deductible, since she was at fault. Our auto insurance company, Liberty Mutual, picked up the other $3,850 (who knew a plastic bumper and headlight costs so much?). The also did not raise our rates, because they offer accident forgiveness on your first accident.
However, this is not the standard for every state, so do your research beforehand. As stated prior, you should know the answer to this question before an accident happens, not after.
It is also beneficial to know what to do when in an accident, before you leave the scene to get the best result with insurance companies.
Unfortunately, whether you are at fault or not in an accident, any auto insurance claim will be added to your CLUE report.
Auto Insurance Type Discussion :
- Which types of auto insurance do you have in your policy?
- What is your state requirement for auto insurance policy coverage?