How do auto insurance companies determine fault?

Insurance companies determine fault in an auto accident by analyzing statements, inspecting damage, and looking at pictures from the scene of the accident.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 27, 2021

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Things to remember...

  • Auto insurance companies must investigate claims when they are filed to determine which party is at fault
  • Fault allocation plays a very important role in determining which insurance company will pay for damages
  • In tort states, the at-fault party’s insurer will pay for both property damage repairs and medical bills
  • In no-fault states, each injured party collects under their own no-fault coverage but fault is still important
  • Fault is determined by analyzing statements, inspecting damage, and looking at pictures from the scene of the accident

In a perfect world, drivers involved in an accident would admit to wrongdoing. Whether it be quick braking or veering into the neighboring lane, the driver would take accountability for their actions and make the claims process as easy as possible.

Unfortunately, it’s more common for drivers to deny culpability and leave it in the hands of the insurance company to decide who really is to blame.

If you’re ever in an accident, it’s nice to know how fault is determined and how the decision will have an effect on your policy status. You may not have a say in the process once it’s started, but knowing how fault is determined before you get into an accident can help you at the scene.

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Why is fault determination so important in tort states?

There are multiple types of insurance systems. The easiest to understand is the tort system.

In a tort state, the law says that anyone who owns a car and gets into an accident must pay for the damages that they cause, which includes both injury and property damages.

Since the law books say that it’s the carrier representing the at-fault driver that must pay for injury and damage claims through liability coverage, fault determination is very important.

If no fault was determined on both ends, the carriers would never know who was at fault for the collision and how much they contributed to the fault.

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Does the fault decision even matter in a no-fault state?

If you live in a no-fault state, it’s fair to assume that the entire fault determination process would be skipped since fault doesn’t really matter. That’s actually not the truth in all cases. The no-fault system refers to bodily injury claims arising from an auto-related accident.

If any driver is injured, the driver would file a claim to pay for their own medical bills under their own Personal Injury Protection coverage.

This rule doesn’t apply for Property Damage claims. If you’re not to blame for a loss and you live in a no-fault state, you still have a right to collect from the at-fault driver’s policy to pay for your repairs; this isn’t the only reason why fault matters.

The insurers still need to know who caused the loss for their own records and rating.


If more than one party is at fault, does it affect the claim?

You may find that the insurer has declared that you were only partially at fault for the accident. If you get a letter saying you’re 25 percent at-fault and the other driver was 75 percent to blame, it’s considered a not-at-fault accident on your end.

It’s a bit shocking to see that fault has been allocated to you, but this is a normal practice.

In the eyes of the insurance company, both parties play a part in a collision most of the time. There are scenarios when a driver is stopped at a light or parked legally. It’s hard to allocate any fault to the victim in these rare instances.

In other instances, drivers who could have swerved or attempted to avoid the collision may play a small role in the outcome.

If you are not at fault but you’re found to play a role in the outcome of the accident, what happens to the claim depends on the state you live in. Some states have comparative negligence rules, while others have contributory negligence rules. If you live in a

If you live in a comparative negligence state, your claims settlement would be reduced based on the percentage that you’re at fault.

Who determines which driver is at fault?

It’s not just one insurer who determines which driver is at fault for a loss. Both car insurance adjusters work together as they are investigating a claim to compare information and to exchange their findings.

Ultimately, at the end, the adjusters will present their information and eventually agree on a fault allocation.

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Which factors are reviewed while fault is being determined?

Determining who is at fault in a loss isn’t a cut-and-dry process. Sometimes the answer is clear, and other times the adjuster has to become an investigator and review the evidence closely. Having the right information when you file a claim can help the adjuster argue their point.

Here’s what is considered:

  • Your statement made to the adjuster
  • The other driver’s statement
  • Statements made by witnesses you reported to your insurer
  • Information found on the police report (if authorities came to the scene)
  • Information on who was cited
  • Placement of the damages to the vehicles
  • What the scene looked like (if you took photos)

You need to help your adjuster investigate the claim if you want a favorable outcome. If the company isn’t defending you like they should, you can always switch carriers for a better experience in the future.

Know How Your Insurer Expects You to Act at the Scene of An Accident

If you know that your actions are the primary reason that a crash happened, it would be helpful to the other driver if you’d admit fault and say what exactly you did. It’s the same when another driver obviously hit you.

After all, we raise our children to be accountable for their actions now, so that quality carries on into adulthood.

While it seems like a morally good move on your part to admit fault as soon as you speak with the other driver, insurance companies frown upon this.

In fact, if you look at a step-by-step guide on what to do after an accident, the guide will specifically say not to admit fault or apologize.

When you admit fault at the scene, it’s hard for the insurer to win as they are negotiating with the other adjuster.

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