Whose Insurance Pays in a Multi-Car Accident?

In multi-car accidents, the first step is to determine fault or negligence. Car insurance companies and police may investigate the incident, gather evidence and interview witnesses to establish who caused the collision. There are two main outcomes when it comes to determining fault, as well as other factors to keep in mind during this process:

A single at-fault driver

If the investigation concludes that one driver was at fault for the multi-car accident, their insurance provider is responsible for paying for the damages to the other vehicles involved. This includes property damage and any other related costs. The at-fault driver's comprehensive coverage, third party fire and theft coverage or third party property damage coverage will typically come into play.

If they’re also at fault for injuries, the at-fault driver’s compulsory third party (CTP) insurance can also cover medical costs and compensation for these. What CTP insurance covers exactly will depend on where you live in Australia, so it’s important to double-check if you’re unsure.

Multiple at-fault drivers

However, it’s important to note that fault may be split among multiple drivers. Insurance companies may divide the liability percentages based on the evidence, with each driver's insurance covering the damages according to their assigned share of responsibility.

For example, in a situation where a car rear-ending another vehicle leads to a chain reaction of rear-ending, each car which rear-ended another would be considered at fault for the vehicle they directly damaged. In this case, the first car which was rear-ended wouldn’t be considered at fault.

Uninsured or underinsured drivers

If one of the drivers involved in the multi-car accident is uninsured, the situation becomes more complex, especially if they’re considered to be solely at fault. In such cases, the parties which aren’t at fault (or their insurers) can seek reimbursement directly from the uninsured driver. However, most insurance policies offer coverage for damage caused by an uninsured driver, though this is typically capped at $5,000.

Excess payments

Keep in mind that in multi-car accidents, each driver may have to pay an excess outlined in their insurance policy, even if they aren’t at fault. The excess is a predetermined amount the policyholder agrees to pay towards the claim and the insurance company covers the remaining costs. Whether you have to pay an excess may depend on the nature of the claim and your policy’s terms and conditions.

Documenting the accident

Regardless of the number of vehicles involved, it’s crucial to document the accident thoroughly. Take photos of the scene, obtain contact and insurance information from all drivers involved and gather witness statements and contact information if possible. Reporting the accident to the police and your insurance company promptly is essential to expedite the claims process.