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Car Insurance Systems: Is California a No-fault State for Car Accidents?

An auto accident can affect the victim’s life, completely turning it upside down. Many often fall into depression as they try to heal from the wounds and trauma following the car accident. Fortunately, victims can recover compensation for the damages from insurance companies.

The state you’re living in and the laws surrounding insurance, whether a no-fault or at-fault regime governs it, affect the process of recovering compensation following an accident. Nobody wants to be in a situation where they have to pay for the damages from an accident that wasn’t even their fault. However, certain states hold drivers accountable for the damages regardless of whether they’re at fault.

This guide will explore the differences between fault and no-fault states, California’s tort laws, minimum insurance requirements in California, and more.

Let’s get into it!

What Does a No-fault Insurance State Mean?

It is a common belief that the responsible party is held accountable for the damages when an accident occurs. However, in a no-fault insurance state, that is not the case.

The term “no-fault state” refers to states with laws that mandate financial responsibility for damages resulting from a no-fault accident from the injured person’s insurer, regardless of who is at fault. Twelve states follow no-fault laws, including Florida, Hawaii, Kansas, Massachusetts, New York, Utah, and others.

A no-fault insurance policy is also referred to as personal injury protection. It covers medical bills for the policyholders and the passengers suffering injuries from the no-fault accident.

What Does Fault-based State Mean?

On the other side of the coin are fault-based states. Here, an injured victim must file a claim against the negligent or at-fault party for the damages from the car accident. In the United States, most states follow the fault-based auto insurance system, a type of insurance system based on tort liability.

The insurance company indemnifies their policyholder from any financial responsibility from an accident due to their fault.

Let’s look at how the car insurance process differs between fault-based and no-fault insurance states.

How Does Insurance Work in No-fault and At-fault States?

Victims suffering injuries from a no-fault accident in no-fault states must file a claim with their insurance company, regardless of who the at-fault driver is. Your auto insurance company then pays for certain losses under the personal injury protection coverage.

In no-fault states, insurance companies do not require the injured driver to prove the negligence or fault of the other driver, meaning there is a high chance that they will not reject the claim since there is no dispute.

Depending on your insurance coverage and policy limits in a no-fault state, an insurance company will reimburse medical expenses, lost wages, replacement services costs, and burial/funeral costs in the event of death following an accident. However, victims cannot claim pain, suffering, or other “general” damages.

No fault state insurance refers to injuries and medical expenses. If the auto accident left the victim’s vehicle damaged, the at-fault driver’s liability insurance might cover property damage. Besides certain exemptions, generally, you cannot sue the responsible party for medical bills for your injuries.

In a fault-based insurance state, victims must file a claim under the negligent party’s insurance company. Since you’re not their client, you may face many challenges when trying to recover compensation for your loss, and they may even reject your claim.

States following the tort system require injured victims to prove the negligence or fault of the other party, which can be difficult and time-consuming.

However, unlike no-fault states, victims in fault-based states can sue for property damage, medical expenses, lost wages, pain and suffering, and other types of damages.

If you’re injured in a fault-based state, you must prove the elements of personal injury claims which include:

  • Duty of care: Defendant owes the plaintiff the duty of care.
  • Breach: Defendant breached the duty of care.
  • Damages: The breach resulted in damages.
  • Causation: The plaintiff suffered injuries due to the defendant’s actions.

Individuals residing in fault-based states can also purchase Personal Injury Protection (PIP) or MedPay (health insurance similar to personal injury protection insurance). 

Additional insurance coverage allows people to choose whether they want to file a claim under their own insurance company or a third party’s insurer. It is much easier to work with your own insurer as you will benefit from prompt payment and avoid all the hassles associated with approaching an adversary’s insurance company.

That said, is California a no-fault state? Let’s find out!

Is California a No-fault State for Car Accidents?

California’s car insurance system follows the tort system meaning that California is an at-fault state where victims must file a claim under the third party’s insurer to recover compensation for their loss. Car accident victims in California have proof of burden, but that’s not the complicated part.

Besides California’s status as an at-fault state, it also follows the comparative negligence law, whereby the compensation awarded following a car accident is divided according to the degree of fault. 

For example, if the court awards $100,000 in damages, and you’re 20% at fault for the accident, you will receive $80,000 instead of the total award.

Who Determines Fault in a California Car Accident

The auto insurance companies and their adjusters determine and assign fault in a California car accident. However, certain factors are critical in helping them make that decision.

Police Reports

In most cases, police reports play a vital role in determining the at-fault party following a car accident.

When a car accident occurs in California, one or both parties typically call the police to report the accident. The local police department sends their officers to the scene to learn more about the accident. They talk to all the parties involved and write a report that both parties or their attorneys can request later.

A police report is an essential document that helps insurers determine the responsible party. However, it is by no means a final say.

Other Evidence and Documentation

In some cases, a police report may not state the facts that led to an accident. Such incidents are possible, especially if the injured driver requires immediate hospitalization for medical treatment or they’re dead. One-sided stories can lead to incorrect police reports, which may warrant further investigations if the police officer does not believe in the story.

Besides police reports, insurance companies also look at other documentation, such as medical reports and medical bills to help them identify the at-fault party and assign fault.

Minimum Insurance Requirements in California

States following at-fault car insurance laws, such as California, require drivers to have minimum liability insurance coverage, which pays for any damages from an auto accident due to their fault.

In California, the minimum insurance coverage is as follows:

  • Bodily injury – $15,000 for one person
  • Bodily injury – $30,000 for the accident
  • Property damage – $5,000

You cannot legally drive in California if you don’t have car insurance with the above minimum averages. However, the state’s minimum requirements should not hold you back from purchasing additional property damage or medical payment coverage. 

Even damage from a minor car accident can quickly exhaust your policy limit, leaving you to pay for the remaining amount from your pocket, which is why it is crucial to consider buying more coverage. Speak to an experienced insurance agent to know more about coverages available in your state. 

I’m Injured in a Car Accident in California. What Should I Do?

Since California is not a no-fault state, you must file a car accident claim against the negligent party. The steps you choose to take following the car accident will determine the outcome of your claim.

Here are some steps to help you increase your chances of recovering compensation:

  • Call the police to help produce a police report
  • Gather evidence, including pictures of the vehicles involved, the roads, and any nearby traffic signs.
  • Take down the other party’s contact and insurance details.
  • Look for witnesses and request their contact information.
  • Head to the hospital to seek medical help. Delaying medical treatment if you’re injured can give the other insurance company a reason to deny your claim.
  • Call your insurance company to report the accident, but make sure not to admit fault.
  • Call the other driver’s insurance company to let them know you wish to pursue a claim.
  • Contact a personal injury lawyer to help you prove fault and recover the compensation you deserve.

Auto accidents can be devastating, and it is crucial to contact an experienced car accident attorney in California, a no-fault state. A legal expert on your side can help prove your innocence and increase your chances of making a successful recovery.

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