What Does Common Law Mean for Car Insurance?

June 12, 2023 - 6:00 am - 3 min read

Understanding Common Law

Common law is a legal system that originated in England and has subsequently been adopted by other countries such as the United States, Canada, and Australia. It refers to law that is based on court decisions and precedents rather than written statutes or codes. In the context of car insurance, common law plays a significant role in determining who is at fault in accidents and how compensation is awarded.

Liability in Car Accidents

Under common law, liability in car accidents is determined by fault. This means that if one driver is found to be at fault for an accident, they are responsible for compensating the other driver for any damages or injuries caused. In order to establish fault, courts will consider a range of factors such as vehicle speed, position on the road, and adherence to traffic signals and signs.

Comparative Fault

In some cases, both drivers may be found to be partially at fault for an accident. This is known as comparative fault and is also determined through common law. Depending on the jurisdiction, the amount of compensation awarded to each party may be reduced by their percentage of fault. For example, if one driver is found to be 60% at fault and the other driver is 40% at fault, the compensation they receive will be adjusted accordingly.

Insurance Coverage

Car insurance policies often include provisions for liability coverage, which helps to protect drivers from financial responsibility in the event of an accident. However, the specifics of these policies can vary significantly by state, and are also heavily influenced by common law. For example, some states may require drivers to carry a minimum amount of liability insurance, while others do not.

Uninsured and Underinsured Motorists

Common law also plays a role in cases where one driver does not have sufficient insurance to cover damages and injuries. In these situations, the at-fault driver may be personally responsible for paying for the damages out of pocket. However, some states have laws in place that require drivers to carry uninsured or underinsured motorist coverage, which can help protect them in the event of an accident with an uninsured or underinsured driver.


In conclusion, common law is a critical component of car insurance law, shaping liability, insurance coverage, and compensation for accidents. Understanding how common law impacts car insurance policies can help drivers make informed decisions about the coverage they need to protect themselves and their vehicles on the road. By working with experienced insurance professionals and staying up-to-date on legal requirements and precedents, drivers can take the necessary steps to minimize their risks and protect their assets.


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