80/20 Auto Insurance Settlements in 2026 (Complete Guide)
An 80/20 auto insurance settlement follows the 80/20 car insurance rule, which means that the driver at fault pays 80% of the settlement, while the other driver's car insurer pays 20%. Insurers determine fault using evidence like police reports and witness statements, affecting liability and compensation.
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Licensed Insurance Broker
Zach Fagiano has been in the insurance industry for over 10 years, specializing in property and casualty and risk management consulting. He started out specializing in small businesses and moved up to large commercial real estate risks. During that time, he acquired property & casualty, life & health, and surplus lines brokers licenses. He’s now the Senior Vice President overseeing globa...
Zach Fagiano
Licensed Insurance Agent
Tim Bain is a licensed insurance agent with 23 years of experience helping people protect their families and businesses with the best insurance coverage to meet their needs. His insurance expertise has been featured in several publications, including Investopedia and eFinancial. He also does digital marking and analysis for KPS/3, a communications and marking firm located in Nevada.
Tim Bain
Updated February 2025
An 80/20 insurance settlement splits fault in an accident, assigning 80% of the blame to one driver and 20% to the other. Insurance companies use this ratio when they determine one party was mostly at fault, but the other driver also contributed.
These settlements affect compensation, with the at-fault driver responsible for covering a larger share of damages. Understanding how insurers assign blame and the implications of these settlements is crucial, especially in states with comparative fault laws that can limit your ability to claim compensation if you’re found primarily at fault.
This guide explains what an 80/20 settlement means, how auto insurance claims work, and what steps to take if you’re being unfairly assigned blame. Protect your rights by understanding how fault works and when to seek legal advice. Enter your ZIP code above for more information on local attorneys to assist with insurance claims.
- 80/20 auto insurance settlements assign fault between two drivers
- Compensation is divided based on the fault percentage assigned by insurers
- Disputes may arise if fault is incorrectly assigned or if settlements are unfair
An 80/20 Auto Insurance Settlement Shares Blame Between Two Drivers
Car insurance companies must assess fault following an accident. If the insurance company determines that you are 20% at fault, their payment responsibility will be to cover the portion owed to the insurance company of the driver who is not at fault.
If the insurance says I’m 20% at fault, they will cover the portion owed to the not-at-fault driver’s insurance, based on their assessment of fault after the accident.
With some claims, this process is very straightforward. The at-fault driver rammed into the not-at-fault driver at a stoplight because he was using his phone, for example. The at-fault driver is 100% at-fault. So, what happens if fault can’t be determined after a car accident? Some claims get split 50/50, with both drivers sharing an equal percentage of the blame.
With other accidents, the blame is split 80/20, which means one driver was mostly at fault, but the other driver also played a role. One driver clearly caused the accident (giving them 80% of the blame), but the other driver’s actions also played a role in the accident (giving them 20% of the blame).
Understanding Fault Allocation in Insurance Settlements| Fault Allocation | Party at Fault | Compensation Impact | Explanation |
|---|---|---|---|
| 0% (No Fault) | Other Driver | Full compensation from the at-fault party's insurance | Claimant is not responsible for the accident. |
| 20% Fault | Claimant Partially at Fault | Compensation reduced by 20% | Claimant shares minor responsibility for the accident. |
| 50% Fault | Equal Fault | Compensation reduced by 50% | Responsibility is equally divided between both parties. |
| 80% Fault | Claimant Majorly at Fault | Limited or no compensation | Claimant is primarily responsible for the accident. |
| 100% (At Fault) | Claimant Fully at Fault | No compensation received from the other party's insurance | Full responsibility for the accident lies with the claimant. |
An 80/20 car accident settlement blame ratio is just one of many possible options. Insurance companies may also apply ratios like 90/10, 70/30, or 60/40, depending on what they consider appropriate. Other ratios, such as insurance 50/50 or those relevant to two-way auto insurance, might also be used.
Read more: What is the difference between a first-party claim and a third-party claim?
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Examples of 80/20 Accidents
There are many situations where an 80/20 insurance claim could emerge. Sometimes, we see 80/20 insurance claims with rear-end collisions. Who is at fault if you rear-end someone who slammed on their breaks is difficult to determine. Typically, a rear-end collision is 100% the blame of the rear driver.
However, we sometimes see a portion of the responsibility assigned to the front driver. The front driver might have “brake checked” the rear driver, for example, or stopped short of an intersection. The rear driver is still more at fault for driving too fast or too close to the front driver, but the front driver is not blameless here.
In other cases, we might see an insurance 80/20 rule settlement for a T-bone accident at an intersection. Driver A might have made an unsafe left turn in front of Driver B. Driver B collides with Driver A. Driver B is mostly at-fault because Driver B made the hazardous turn. However, Driver A might be found at-fault because Driver B was speeding.
80/20 Insurance Settlement Breakdown| Fault Allocation | Party at Fault | Claimant Compensation | Example |
|---|---|---|---|
| 80% Claimant Fault | Claimant | 20% | If damages total $10,000, the claimant receives $2,000. |
| 20% Other Driver Fault | Other Driver | 80% | Other driver compensates 80% of damages incurred by claimant. |
Ultimately, each accident scenario is unique. To accurately determine fault, insurance companies will consider various forms of evidence such as police reports, witness statements, dashcam footage, and other relevant information. This process helps ensure an accurate assessment and can affect the comprehensive insurance quote provided.
Impact of an 80/20 Car Insurance Settlement on Compensation
With an 80/20 insurance settlement, the at-fault driver’s insurance company will pay 80% of the compensation, while the not-at-fault driver’s insurance company will pay 20% of the compensation. You are 80% at fault for the accident, so you (or your insurance company) will pay 80% of the compensation owed.
As the at-fault driver, you are entitled to only 20% of the amount awarded, as you are liable for the other 80%. To minimize its financial liability, an insurance company often aims for an 80/20 insurance claim settlement. This arrangement reduces costs for the company by transferring part of the responsibility (and a share of the payment) to the other driver’s insurer.
Some shady insurance companies will use 80/20 insurance claims to their advantage. Your claims adjuster, for example, might urge an 80/20 insurance claim if they find that the innocent driver doesn’t have insurance. In this case, the innocent driver has no way to claim the additional 20%, which saves the car insurance company money.
If you were not at fault for an accident in any way, then you should not be assigned any blame. If a claims adjuster is pushing for an 80/20 insurance claim, then it’s within your right to push back. If the insurance company continues to insist on an 80/20 insurance claim without merit, then consider hiring a lawyer.
Read More: How to File an Auto Insurance Claim
Consider Hiring a Personal Injury Lawyer
Agreeing to a Nationwide rear-end collision settlement with an 80/20 split is a crucial decision for various reasons. In many states, including Massachusetts, comparative fault laws dictate that if you are found to be more than 50% at fault for an accident, you cannot file a lawsuit against the other driver.
For example, if you are determined to be 51% or more responsible for the accident, you may be barred from seeking legal action against the other party involved. This means that if you are primarily at fault in an accident, your ability to sue the other driver could be limited. In some states, you cannot claim any compensation after an accident if you receive any blame.
Agreeing to an 80/20 settlement can significantly impact your compensation, both now and in the future. This type of settlement might lower the total amount you receive from the insurance company and could complicate your ability to claim whiplash and other damages.
An 80/20 insurance settlement can significantly impact your compensation and legal rights. Always challenge unfair fault assignments to ensure you're treated fairly.
Tracey L. Wells Licensed Insurance Agent & Agency Owner
Every 80/20 accident scenario is unique, so we advise consulting a car crash attorney if you have concerns about your insurance company’s conclusions.
Read more: Does auto insurance cover whiplash symptoms?
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Understanding the Impact of 80/20 Insurance Settlements
An 80/20 auto insurance settlement allocates 80% of the fault to one driver and 20% to another. This type of settlement is common when one driver is predominantly at fault, but the other driver is also partially responsible. For instance, with State Farm 80/20 rental insurance, this arrangement may apply to situations where liability is shared, but one party is significantly more liable than the other.
If you were absolutely not at fault for the accident, then never accept an 80/20 auto insurance claim. Insurance companies may use 80/20 insurance settlements for their own benefit at your expense.
Consider talking to a lawyer to ensure you get fair treatment after a car accident. To find an attorney who specializes in car accident claims in your area, enter your ZIP code and get connected with professionals who can guide you through the process.
Frequently Asked Questions
What is an 80/20 auto insurance settlement?
What is an 80/20 policy? An 80/20 auto insurance settlement refers to a specific type of settlement arrangement between an insurance company and the policyholder after a car accident. In this scenario, the insurance company typically agrees to pay 80% of the total claim amount, while the policyholder is responsible for covering the remaining 20%.
How does the 80/20 auto insurance settlement work?
How does 80/20 insurance work? When an insurance company agrees to an 80/20 settlement, they will pay 80% of the total claim, and the policyholder is responsible for paying the remaining 20%. For example, if the total claim amount is $10,000, the insurance company would pay $8,000, and the policyholder would be responsible for paying the remaining $2,000.
Why would an insurance company agree to an 80/20 settlement?
Insurance companies may agree to an 80/20 settlement for various reasons. It could be due to a policyholder’s limited coverage or policy terms that specify a percentage-based co-payment. Additionally, the settlement amount could be influenced by factors such as fault determination or the terms of the auto insurance policy.
Do all auto insurance policies have an 80/20 settlement option?
No, not all auto insurance policies have an 80/20 settlement option. The availability of this type of settlement arrangement depends on the terms and conditions outlined in the insurance policy. It is essential to review your policy documents or consult with your insurance provider to understand the specific settlement options available to you.
What factors influence an 80/20 settlement arrangement?
Several factors can influence an 80/20 settlement arrangement. These may include the terms of the insurance policy, state laws governing insurance claims, the degree of fault assigned to each party involved in the accident, the nature and severity of the damages, and any other relevant circumstances specific to the incident.
Learn how state laws may affect your settlement or what the car insurance requirements are in your area.
What does 80/20 mean in a car accident?
The 80/20 rule in insurance often refers to the coverage split between insurance and out-of-pocket costs. For instance, if your insurance covers 80% of the repair costs and you are responsible for the remaining 20%, this is an application of the 80/20 rule.
What is the formula for insurance settlement?
How do you calculate 80 20? The process for calculating an insurance settlement typically involves evaluating the total damages, factoring in deductibles, and applying the coverage limits of your policy. Here’s how it can be broken down:
- Calculate Total Damages: Add up all the damages, which can include medical expenses, vehicle repairs, lost wages, and other associated costs.
- Determine Fault: Figure out the percentage of fault each party holds in the accident, such as 80/20 or 70/30.
- Apply Fault Percentage: Multiply the total damages by the fault percentage assigned to each party.
- Account for Deductibles: If there’s a deductible, subtract that amount from the settlement figure.
This formula ensures the settlement reflects both the damages incurred and the specific details of fault and policy terms.
What does it mean to settle an insurance claim?
Settling an insurance claim means reaching an agreement between the insured and the insurance company on the compensation amount for damages or losses covered by the policy. This involves evaluating the claim, negotiating the settlement amount, and finalizing the payment.
How many types of claims are there in insurance?
Insurance claims generally fall into several types, including property claims (for damages to physical assets), liability claims (for damages to others), and health claims (for medical expenses). Each type addresses different aspects of insurance coverage.
Learn more: What is the property damage insurance claims process?
What is the purpose of 80/20?
What is the 80/20 rule’s purpose? The purpose of the 80/20 rule is to demonstrate how a small percentage of inputs or efforts can lead to a large percentage of results or outputs. In insurance, it often refers to coverage ratios where a significant portion of costs is covered by insurance while the remainder is paid out-of-pocket.
Which car insurance company has the highest claim settlement?
How much are most car accident settlements?
How long does it take for a car insurance claim to settle?
What is the fastest insurance claim settlement?
What is the settlement ratio in insurance?
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