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Automobile Insurances and Accidents

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When you get into an accident, two automobile insurances could potentially be required to pay the bill: yours, and the other drivers. Liability insurance is mandated under the law, so both drivers should have at least liability insurance coverage in most cases. With two possible automobile insurances involved, how do you determine who pays the bill?

Automobile Insurances and Accident Payouts

In order to determine which of two (or more) automobile insurances pay the bills for an accident, several important factors must be considered. First and foremost, you must know whether you are in a no fault state. If you are in a no fault state, your insurance company will pay for your damages and the other party's insurance company will pay for his damages, regardless of who is at fault. There are 12 states within the United States that operate on a no-fault system (or that give drivers the opportunity to opt-in to no fault). In those twelve states, the question of which of two automobile insurances pays is simple.

However, in other states, the person who is at fault for the accident is responsible for paying damages. This means that if you cause an accident, your insurance policy liability coverage should pay for the damages the other driver suffered, whether they are property damages or personal injury damages. On the other hand, if someone causes an accident and hits you, his insurance company should pay for your damages.

When an accident occurs, the two respective automobile insurances will speak to their own clients. After reviewing police reports, reading witness statements or examining other evidence, and interviewing those involved in an accident, each of the automobile insurances will determine who it believes is responsible for the accident.

If the two insurance companies agree, then the insurance company of the at-fault party will pay. Sometimes, each insurance company will pay their client's claims before this process is finished. If this is the case, the insurance company of the at-fault person will then send a check to reimburse the insurer who already paid out the claim.

If the insurance companies do not agree, however, the case may go to binding arbitration or even to court, depending on the circumstances and the jurisdiction. In either binding arbitration or court, a third party (a judge or arbitrator) will determine who was liable. The automobile insurances of the party responsible will then pay out the damages.

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