Be sure to subscribe, and be notified of new content, events and promotional offers.
        

What is a 50 / 50?

50 50 liabilityIn this post, I explain comparative liability in terms that anyone can understand, and explain what it means in terms of out-of pocket expense and how it affects your future insurance rates.

What it is

Comparative Liability is a term that insurance companies use when both drivers in an accident have some degree of fault, but neither party is completely responsible. It should be simple enough, but confusion arises while trying to figure out how much money will come out of your pocket, and how it will affect your future rates.

Example

The easiest way to understand this type of insurance claim is to take an example, and follow it to conclusion. A really common example is when two people back into each other in a parking lot.

 

Comparative Liability

 

Agreement

First things first, there should be some agreement that there is comparative liability. If both drivers agreed that they were both backing up and didn’t see each other, or they both thought the other driver was going to stop, and both drivers were honest and level headed, able to take responsibility for this particular mistake, and willing to admit that they were partially at fault, then this would be an easy to resolve, simple 50 / 50 accident.

I’ll explain in a minute how this is resolved, but first you should know that it hardly ever goes down like this.

Usually both parties think the other party is at fault, and blame the other person. Both drivers usually claim that they backed out first, and accuse the other driver of lying.

Keep in mind that just because they were both backing, doesn’t mean it is automatically comparative liability, but there are usually no witnesses, and no way to prove anything.

Sometimes the damage on the vehicles will support the claim that one driver had “taken possession” of the isle, and had the right of way. For example, if one driver’s damage was in the middle of the back bumper, and the other driver’s damage was on the passenger side door, it would support the claim that the driver with door damage had backed all of the way out, taken possession of the isle, and had the right-of- way

 

(the driver on the left has the right of way)

Comparative Liability in Parking Lot

 

For this example, since I’m explaining comparative liability, let’s assume that neither driver can prove he has the right of way, and both drivers are equally at fault and assigned 50% of the blame. In this example both drivers’ insurance adjusters agree to settle the claim as a 50 / 50.

Out-of–pocket

This is the way your expense would break down:

If you went through your own insurance, you would pay a percentage of your deductible equal to your liability. So for a 50 / 50 accident you would pay 50% of your deductible.

You would pay the deductible at the body shop after your car was repaired. Your own insurance would cover the other half of the deductible, as well as the entire amount of the remaining cost of repair, because collision coverage covers the cost of repair, less the deductible, regardless of who was at fault. Your insurance is going to collect the other 50% of your deductible from the other driver’s insurance.

Your insurance would later send a copy of the repair estimate to the other insurance company, and be reimbursed for 50% of the repair of your car. They are simply being reimbursed for the amount of the repair that wasn’t your fault. Your insurance company will also write a check to pay for half of the other driver’s repair.

 

 

No Collision Coverage?

If you don’t have collision coverage, you will be forced to go through the other insurance company for your repair. Since you are going through the other insurance, there is no coverage for the percentage of the accident that was your fault. The other driver’s insurance company will estimate the cost of repair, and send you a check for 50% of the repair.

You will only be paid for the portion of the repair that was the other driver’s fault, which in this example is 50%. It would break down as follows:

 

Disagreements

Now that we have covered the very basics, there is something else you should know.

You should know that the insurance adjusters do not have to agree to do comparative liability. Your insurance could call it a 50 / 50, and the other driver’s insurance could decide you were 100% at fault. The good news is that your insurance company might still pay the percentage of your deductible based on their own liability determination, independent of the other insurance company’s liability position.

On the other hand, they may remind you that you are responsible for your deductible, in which case you will have to try to collect it from the other driver’s insurance. Considering they are not agreeing to comparative liability, you chances of collecting are zero, but you may get reimbursed if your insurance wins in arbitration. (discussed below)

Future Rates

Your future rates are based on your insurance company’s liability determination, independent of the other insurance company’s liability determination. Typically, no matter what amount is paid on a claim, the accident will not count against you unless you were more than 50% at fault, so a 50 / 50 should not affect you negatively. Obviously I cannot speak for every insurance company, so you should verify this with your adjuster.

Arbitration

It should also be noted that if the insurance companies do not agree on comparative liability percentages, the claim will eventually end up in arbitration. In this example, your insurance company would be arguing it was 50 / 50, and the other arguing that you were 100% at fault. If the final determination after arbitration is that you were more than 50% at fault, it may affect your record adversely. In other words, you would have an “at fault” accident on your record that could make future insurance rates higher.

Questions

Hopefully this post was helpful explaining comparative liability, and how it affects your wallet. Keep in mind that if I covered every possible scenario it would be a book, not a post, but I’m happy to answer questions.

If you have any questions please send me an email, or just ask your question in the comments section below. I’ll try to get back to you the same day.

Where Do I Go for Car Accident Treatment?

If you were injured in a car accident, and are thinking of getting treatment, then reading the article below is crucial to make sure you don’t make a huge mistake that will end up costing you your health. Reading the article below can completely change the outcome of your treatment. If you were involved in… Continue Reading

Understanding Car Insurance – Part 1

When it comes to understanding auto insurance after a car accident, the first thing you need to do is break it down into a couple of categories. There are coverages for property damage, which include the vehicles, street lights, fences or whatever other property was damages in the accident. There are separate coverages for injured… Continue Reading

Should I Use the Body Shop that the Insurance Company Recommends?

At some point after a car accident, you are going to need to have your vehicle repaired. If the accident was your fault, you will need to have it repaired by your own insurance company, assuming that you have collision coverage. If the other driver was at fault for the accident, you will have a… Continue Reading

Should I Go Through My Own Insurance, or the Other Guy’s?

One question I have been asked so many times, is “Who’s insurance should I use to pay for my auto repair and injuries?” When someone is hurt in an accident, or even if they just have vehicle damage, and it’s the other driver’s fault, people have a tendency to want to go through the other… Continue Reading

Are You a Fracture Waiting to Happen?

When it comes to osteoporosis, do you know the score? If you or a loved one is over 45, then you should know what a “DEXA” is, and how to read one. It’s important to understand that most people who have osteoporosis won’t ever know it before fracturing a bone. Not even an x-ray done… Continue Reading

Legislating Preventative Health Care is a Fantasy

Ever since President Obama first started talking about health care reform, politicians have been talking about preventative medicine by legislation, but it’s all bogus. Our President said “Simply put, in the absence of a radical shift towards prevention and public health, we will not be successful in containing medical costs or improving the health of… Continue Reading

The Good News About Disease

I thought I would let you know the good news about disease, and no, it’s not that you can stay home from work. The good news is that almost all conditions you are likely to acquire can be prevented at the exact same time. Drug commercials are spending billions of dollars trying to sell you… Continue Reading

What is Whole Wheat Anyway

This is something that is important to understand, so you won’t get fooled at the supermarket. You probably already know that whole grains are good for you, and refined wheat is not so good for you. I’m not going to talk about why. (Google it) The problem is, people don’t seem to understand that multi-grain,… Continue Reading

Help for Obese Kids?

The other day I was responding to a question that went something like this. If you could give 1 health tip designed to decrease childhood obesity, what would it be? After thinking about it for a minute, I realized that I would give this health tip to anyone, assuming I could only give 1, and… Continue Reading