Car Accident Laws You Should Know (2025)

Overview Of Laws on Car Accidents

Car accidents are subject to a wide range of motor vehicle accident laws. Let’s dive into some of the most impactful laws that cover how insurance plays a part and how courts decide whether you are owed compensation after an accident.

Insurance Laws

All states except New Hampshire require drivers to carry some form of car insurance. New Hampshire allows drivers to opt out of insurance coverage only if they can show they have the financial resources to pay out of pocket in the event they are at fault for an accident. Most states have set minimum insurance coverage amounts for potential damages from a car accident, such as bodily injury and property damage.

If you are at fault for an accident without insurance, you may be personally responsible for covering the cost of losses to yourself and the other driver. The average annual cost of auto insurance is just over $2,000, an amount much less than what you might be liable for if you’re deemed at fault for an accident and don’t carry insurance.

Some states, such as New York and Utah, have adopted so-called “no-fault” laws. These states require drivers to carry personal injury protection insurance that covers the costs of bodily injuries in a car accident without regard to who caused the accident.

There are more types of car insurance than many drivers realize. These are some of the most important ones to know:

• Bodily Injury Liability: Pays for injuries you cause to others
• Property Damage Liability: Pays for other people’s property you damage
• Collision: Pays to repair your vehicle regardless of who was at fault
• Comprehensive: Covers storm damage, fire and other non-driving perils
• Uninsured/Underinsured Motorist: Pays if you’re hit by a driver with insufficient insurance
• Personal Injury Protection (PIP): Covers your medical bills and lost wages regardless of who caused the crash
• MedPay: Covers medical bills regardless of who caused the crash

States typically require drivers to carry liability insurance (both for bodily injury and property damage), and no-fault states will typically require PIP. If you’re involved in an accident without insurance, you could face criminal charges for the violation on top of civil liability for the other driver’s damages.

Liability - Who is at Fault?

Fault, or liability, can fall on multiple parties after an accident—be it a driver, vehicle manufacturer, employer, or even a government entity in charge of road maintenance. Factors such as traffic laws, witness statements, and evidence from the accident scene are essential when determining liability.

Even in no-fault states, the at-fault driver typically pays for property damage such as car repairs or diminished value. If you are at fault for an accident, you may also see your insurance rates increase as a result.

Unless a driver intentionally caused a car accident, fault is often determined by looking for negligence. Establishing negligence requires these four elements:

• Someone owed you a duty
• They breached that duty
• You were injured or suffered a loss
• The breach of duty was the cause of your injury or loss

All four elements must be proven before you are legally entitled to compensation.

A Quick Look at the Claim Timeline

Traffic, insurance and negligence laws all work together to shape the lifecycle of your car accident claim. Although precise laws and deadlines vary by state, most claims involving motor vehicle accidents include the following steps:

Notifying Your Insurance Company

Most car insurance companies require you to immediately notify them if you have been involved in a crash. Making this notification is not the same as filing a claim.

Filing an Insurance Claim

The next step is usually completing and filing an insurance claim. Although you aren’t required to retain a lawyer, working with a car accident lawyer is highly advisable if your claim is a high-value one.

Negotiating a Settlement

Insurance companies will often try to offer you a lowball settlement at first. In some cases, they might even deny your claim outright. This is where it becomes essential to work with a lawyer.

Car accident lawyers have extensive experience dealing with insurance companies, and they can often negotiate a fair settlement without needing to take your case to court.

Filing a Lawsuit

Most attorneys will try to go the negotiation route before they file a lawsuit. However, if an insurance company is unwilling to offer a reasonable settlement, litigation might be needed.

The negotiation phase can take some time, but you should be mindful of your state’s statute of limitations for car accident lawsuits. The countdown typically starts on the day of the accident itself.

Sometimes, an insurance company is willing to negotiate a settlement once the lawsuit has been filed. If not, it might need to be decided in a civil trial.

Who Is Liable When More Than One Party is at Fault?

Sometimes the evidence suggests that more than one party was at fault. In that case, you may share fault for the accident. How this impacts your ability to recover compensation for the accident will depend on which state laws apply.

• Contributory Negligence States: Under this rule, you can only recover damages if you have no fault for the accident. This very strict rule is in place in Alabama, Maryland, North Carolina, Virginia, and Washington D.C.
• Pure Comparative Negligence States: In the 12 states that follow this rule, being partially at fault will not prevent you from recovering damages, but it will reduce how much you can recover. For example, in a case where damages total $100,000 and you were 10% at fault, you can recover a maximum of $90,000.
• Modified Comparative Negligence States: This is the most common rule followed in 33 states. Your ability to recover decreases by your percentage of fault just as it does in a pure comparative negligence state. However, you are barred from recovering anything if your fault is at or above 50% or 51% (state thresholds vary between these amounts).

Navigating negligence laws can be complicated and usually requires a lawyer's help to be successful, even if you weren't at fault. Fill out the form on this page to connect with a local car accident lawyer today.

Damages in Car Crash Law

After a car crash, car injury law might be eligible to collect compensation for what you have suffered. The term for this in car accident laws is “damages”. Common types of damages recovered in car accident cases include:

• Medical bills
• Rehabilitation costs
• Lost wages
• Vehicle repairs
• Compensation for a totaled car
• Pain and suffering
• Funeral costs (in wrongful death cases)

The average car accident settlement in recent years was just over $30,000, but the unique circumstances of your case will dictate the value of your damages.

Limitations on Auto Accident Legal Cases

Motor vehicle accident laws require that you file your claim in a timely manner and secure evidence to support your claim. Failing to do either of these things could cause your claim to fail.

The laws that require you to file a timely claim are called statutes of limitations. The time to file a car accident lawsuit is set by each state. The most common statute of limitations length is two years, but it can be as short as one year or as long as six years. In certain cases, the statute of limitations may be paused or extended through a tolling agreement. This legal arrangement allows both parties to suspend the time limit temporarily, providing additional time for negotiations or addressing other legal matters without forfeiting the right to pursue a claim.

Aside from filing in time, the most important hurdle between you and receiving compensation from your car accident will be proving your claims with evidence. Evidence can take many forms, and may include:

• Police reports
• Witness statements
• Photos or video of the accident
• Medical records
• Vehicle damage assessments
• Expert witnesses, such as reconstruction analysts

How A Car Accident Lawyer Can Help

It is very often worthwhile to get an attorney for a car accident. Qualified car accident lawyers will be familiar with your local statute of limitations and the types of evidence that could be most effective for your case. Working with a lawyer can alleviate the stress of navigating the legal system, and if you’re concerned about timing, there are still options available even if you’ve delayed seeking legal help after your accident.

Even before a lawsuit is filed, a lawyer can help by negotiating on your behalf with insurance company representatives in car injury law cases. According to the Insurance Research Council, 85% of personal injury case settlements involved a lawyer, and those who hired a lawyer received settlements valued 3.5 times greater than those who did not. Working with a lawyer improves your chances of settling for more without going to trial.