After a car accident, many people wonder who actually pays for car damage. It depends on who caused the accident and, as a practical matter, on the insurance coverage that each driver has -- or doesn't have.
If Another Driver Caused the Accident
If another driver caused your accident, he or she is responsible for paying to have your car repaired. In most cases, of course, the other driver has insurance that will pay. If he or she doesn't have insurance, you can have your insurance company pay to repair your car damage -- if you have collision coverage on your damaged car. If you don't have collision coverage, you can go after the other driver to try to make them pay, but it might be difficult. Usually, drivers who don't have car insurance, even though the law requires it, don't have piles of cash laying around that can be used to pay to repair your car.
Let’s look at a few different scenarios that can spring up when the other driver caused your accident.
Driver Who Caused Accident Has Insurance. Liability insurance covers damages that a driver is legally liable for. In car accident insurance lingo, property damage mainly means damage to your car. Therefore, your claim to have your car damage repaired will be against the other driver's "property damage liability insurance."
Almost every state has a law requiring drivers to have liability insurance, including property damage liability insurance. $10,000 is a popular minimum coverage requirement for property damage liability insurance, but your state may have a different minimum requirement. And, of course, the at-fault driver will probably have more insurance coverage than the bare minimum.
Therefore, because it is required, the odds are that the driver who caused your accident has property damage liability insurance. If the other driver's insurance company agrees that its driver caused the accident -- and is therefore liable for paying damages -- they will pay for your car repairs. (Learn more about Car Accident Insurance Settlements).
Driver Who Caused Accident Does Not Have Insurance But You Do. But, what if the driver who caused your accident doesn't have liability insurance? You'd be amazed how many uninsured motorists are on the road. Or, what if the at-fault driver has insurance but their insurance company will not admit that their insured caused the accident? If the driver who caused the accident has no insurance, or if their insurance company denies that the other driver is liable, the best place to turn is to your own insurance company -- provided that you have collision coverage on your damaged car.
If you have collision coverage, your insurance company will pay to repair your car, regardless of who caused the accident. In other words, collision coverage is a no-fault coverage. However, there is a certain portion of the cost -- called the “deductible” -- that your company won't pay. You have to pay that. Let's say you have collision coverage up to $50,000 with a $500 deductible (the higher the deductible, the lower the cost of the insurance). If it will cost $12,000 to repair your car, your insurance company will pay $11,500 and you will pay the deductible amount of $500.
So, can you get your deductible back? If the driver who caused your accident has no insurance and is financially unable to pay, it may be difficult. You can try to recover by suing that person. However, remember that getting a judgment against someone in court is not the same as collecting the judgment. To collect, the other driver must have something (a bank account, a car or some other property with equity in it) that you can "execute on" to collect your judgment.
If you have your car repaired by your insurance company under your collision coverage, and the driver who caused your accident has insurance, you should be able to get your deductible back from that driver's insurance company. Usually, your insurance company will get it for you. They will follow insurance company procedures to get your deductible -- and the amount they paid to repair your car -- from the company that insures the driver who caused the accident. This usually takes 1 to 2 months.
Finally, in case you are wondering, making a collision coverage claim under your policy should not increase your premiums when the accident was not your fault. Learn more about Using Collision Coverage for Vehicle Damage.
Driver Who Caused Accident Does Not Have Insurance, and Neither Do You. This is the tough one. The at-fault driver is clearly responsible for paying for your car repairs. But, as a practical matter, you can't collect from someone who has nothing. In this situation, you may end up paying. You can always file a lawsuit against the at-fault driver, on the off chance that he or she will come up with money to repair your car.
In many states, if a person has a judgment against them arising out of a car accident, their license will be suspended when you notify your Motor Vehicle Administration (or Department of Motor Vehicles, or whatever it's called in your state) of the judgment. Now that's some serious pressure on the at-fault driver to come up with the repair money.
Driver Who Caused Accident Has Insurance, and So Do You. If the driver who caused your accident has liability coverage, and you have collision coverage, you have a choice. You can have either insurance company pay to repair your car damage. Which is better? The argument in favor of having the other driver's insurance company repair your car damage is that you won't have to pay a deductible. In addition, the other company must pay for a rental car while your car is being repaired, but your insurance company only has to pay for a rental car if you have rental reimbursement insurance. The main argument for having your insurance company pay to repair your car damage is that you have certain rights under your insurance policy -- such as a quick and cost-effective process for resolving disputes -- that you don't have when you deal with the other driver's insurance company.
A final consideration is the amount of coverage. If the other driver doesn't have enough coverage to pay to repair your car, and you do, of course you should have your insurance company pay.
If You Caused the Accident
Even if you caused the accident, your insurance company will pay to repair your car -- again, if you have collision coverage. Remember that collision coverage is no-fault. But you will be out the deductible. If you caused the accident and don't have collision coverage on your car, you’ll end up having to pay out of pocket.
Now that you know who pays for damage to a car after an accident, learn about How Much is Paid for Vehicle Damage after an accident.