In our last post, we began talking about no-fault insurance and generally how it works. As we mentioned, no-fault insurance laws vary from state to state and Massachusetts uses a pure no-fault approach, which means that insurance companies pay the full amount of first-party benefits regardless of who is at fault and place restrictions on the right to sue other drivers for damages.

This doesn’t mean, though, that fault has absolutely no consequence for drivers in the state of Massachusetts. According to the Massachusetts Division of Insurance, fault impacts the amount of money insurance companies must pay in damages, and often the at-fault driver’s future insurance costs for a time.  

Under state law, if a driver’s actions were over 50 percent the cause of the accident, that driver’s insurance company is obligated to cover all of the costs incurred by the victims of the accident. If all drivers involved in an accident are partly to blame and there is no party who is over 50 percent at fault, insurance companies are only obligated to pay for the costs of other injured parties to the extent they were not at fault for the crash.

As far as the impact of fault on insurance premiums, this is determined by each insurance company under the terms filed with the Division of Insurance. Typically, insurance companies work on a point system which assigns a certain number of points for each type of at-fault accident and use the overall number to adjust premium costs. These can be impacted for between three and five years, so there can certainly be an impact for at-fault drivers.

In a future post, we’ll take a closer look at how insurance companies determine who is at fault and what policyholders can do when they disagree with an insurance company’s decisions.

Source: Massachusetts Division of Insurance, “Frequently Asked Questions About At-Fault Accident Surcharges For Personal Automobile Insurance Policies,” Commissioner of Insurance Joseph G. Murphy, July 2012.