Even the most minor car accident can be a disruptive and jarring experience. It isn't always easy to know what to do first, and what to expect. And when injuries are serious and vehicle damage extensive, the questions can multiply right along with the stress. In this article, we'll cover one of the most common questions that arise after a car accident: What kind of losses are recoverable from the at-fault driver?
As traumatic as car accidents can be, the good news is that in most instances you will be able to recover compensation for your losses. But in many cases, the specifics will depend on where you live, and available car insurance coverage.
For those who live in traditional fault-based car insurance states -- that's a significant majority of states -- after a car accident, your options for recovering compensation are limited only by the at-fault driver's car insurance coverage and personal ability to pay a judgment.
Specifically, you can file a third-party insurance claim or personal injury lawsuit claim and ask for compensation for:
In these cases, the at-fault driver's insurance policy will determine what amounts of coverage are available for each component of your claim. If the other driver's insurance coverage is insufficient to pay your claims in full, you have the option to sue the other driver individually for the difference, but there is no guarantee that you will be able to successfully enforce a money judgment against the other driver if he or she has limited personal assets.
When the other driver doesn't have car insurance, or their insurance limits don't cover your losses, if you have uninsured motorist (or underinsured motorist) coverage as part of your own car insurance policy, you can make a claim with your own insurer under that coverage.
When it comes to vehicle damage, especially when you're at fault for the accident, your own car insurance policy may dictate your options. Specifically, your own policy may provide coverage for damage to your vehicle (collision coverage), or the damage to or destruction of any of your property inside the vehicle (comprehensive coverage). Keep in mind that your collision coverage will usually have a deductible (e.g., $1,000) that you will have to pay out of pocket before the insurance company will pay any money toward your vehicle repair bill.
When another driver is at fault for the accident, any vehicle damage (or other property damage resulting from the crash) can be part of a third-party insurance claim or lawsuit against the other driver.
For more information, see Car Accident Repair Options and Insurance Availability.
If you live in one of the dozen or so "no-fault" car insurance states, you must look to your own insurance company first (and sometimes exclusively) for your medical bills and certain other out-of-pocket losses, without regard to who was at fault for the accident.
A no-fault claim (usually made under mandated "personal injury protection" or "PIP" coverage) gets you compensation for medical bills, lost wages and replacement services expenses (first party benefits coverage) you incur as a result of your car accident injuries.
Your state's law and/or your chosen coverage may limit the amounts payable for medical bills, lost wages and replacement services expenses. For example, in Michigan the no-fault law limits your lost wages to a monthly maximum amount and cuts off all lost wage claims after three years; it also limits replacement services to $20 per day. However, Michigan is one of the only no-fault states that places no limits on medical expenses payable via a PIP claim.
In all no-fault states, if your injuries meet a certain threshold -- meaning they're "serious" according to a statutory definition, and/or your medical bills exceed a certain dollar amount -- you're free to step outside the confines of no-fault and file a claim or lawsuit directly against the at-fault driver. At this point, all options are on the table when it comes to compensation, including recovery for non-economic losses like "pain and suffering" (which, again, aren't an option in a no-fault or PIP claim).
Since the laws in no-fault states vary significantly in terms of what types and amounts of benefits the car insurance company must pay via PIP coverage, it makes sense to educate yourself about your state's no-fault laws and all available options when you purchase a car insurance policy, so that you will not be surprised when make a claim after a car accident.