What Happens When Insurance Companies Disagree on Fault

When two drivers are involved in an accident, one of the first steps taken by their insurance companies is to determine who was at fault. This process can be straightforward in some cases, but it becomes more complicated in others, especially when the insurers involved come to different conclusions. Disagreements between insurance companies about fault can lead to delays, disputes and confusion for the policyholders involved.

The Claims Process and Fault Disputes

After an accident, each driver typically reports the incident to their own insurance company. The insurers then begin their investigations, which may include reviewing police reports, speaking with witnesses, examining vehicle damage and gathering statements from the drivers. Based on this information, each company decides who was responsible for the accident.

Sometimes, insurers agree on the outcome. But when they don’t, the situation can become more complex. One company may believe its policyholder was not at fault, while the other may argue the opposite. These disagreements can affect how claims are paid, whether deductibles apply and how long it takes for repairs or reimbursements to be processed.

In some cases, both companies may agree to share fault, assigning a percentage of responsibility to each driver. This can influence how much each insurer pays and whether the drivers involved see changes in their premiums.

How Disputes Are Resolved

When insurance companies cannot agree on fault, they may turn to a process called intercompany arbitration. This method is used within the industry to settle disputes without going to court and can be more efficient than litigation.

While arbitration can help resolve disagreements between insurers, it does not always happen quickly. During this time, drivers may need to work with their auto insurance company to cover repairs or medical expenses, depending on the terms of their policy. If a driver disagrees with how their insurer handles the claim, they may have the option to file a complaint with the state insurance department or seek legal advice.

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This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.