Laws covering car accidents generally come under two categories: no fault and fault liability. No-fault liability usually refers to insurance coverage that allows the insured to recover damages and financial losses from their own policies. These are generally aimed at reducing lawsuits since the fault of the drivers doesn’t have to be assigned. The policies generally restrict the policyholder’s options to bring suit.
Fault refers to the tort-based system which assigns blame on the part of one of the drivers or contributors to the accident, taking into account the degree of blame and deciding which party will be liable for damages and loss.
The laws of the state where the accident occurred are generally those that determine which party pays damages. There are four main categories of liability: the tort-based system, the no-fault system in which the insurance companies compensate the drivers for loss and damages and the drivers’ rights to sue are protected, the no-fault system that restricts the policyholders’ right to bring suit and states that offer a choice between no-fault and traditional tort systems.
In some states a threshold has been drawn to limit the amount that a driver must self-insure themselves for. In some, this threshold is based on a specific dollar amount and in other states it may depend upon the circumstances of the collision. For instance, a no-fault state may allow that system for all losses except in cases where there is serious personal injury or one of the drivers was violating the law, such as driving on a suspended license or in a state of impairment from drugs or alcohol.
In states that operate under a strict fault system, the driver who caused the collision is liable for all damages to the vehicles involved and any serious injuries that may occur because of it. Many insurance policies take into account that some states have different systems and are underwritten accordingly.
Regardless of which state the accident occurs in or what type of policy those involved have, they are legally bound to report the accident to the proper authorities and exchange insurance information. If there is no witness to the accident and no one occupying the other car, the driver is legally required to leave a note with his contact and insurance information with the car that he or she damaged. Failure to abide by these requirements is a violation of the law and the persons involved could conceivably be charged with hit and run, a serious criminal offense.