Comparative Negligence

DEFINITION of 'Comparative Negligence'

A principle of tort law that applies to casualty insurance in certain states. Comparative negligence states that when an accident occurs, the fault/negligence of each party involved is based upon their respective contributions to the accident. This allows insurers to assign blame and pay claims accordingly.

BREAKING DOWN 'Comparative Negligence'

Comparative negligence is most commonly used to assign blame in auto accidents. If two drivers both break the same traffic laws in an accident, then both may be denied their claims. Many carriers assign blame between drivers on a percentage basis, such as 70/30.

RELATED TERMS
  1. Unintentional Tort

    A type of unintended accident that leads to injury, property ...
  2. Tort Law

    The area of law that covers the majority of all civil lawsuits. ...
  3. Auto Insurance

    A policy purchased by vehicle owners to mitigate costs associated ...
  4. Personal Injury Protection - PIP

    A feature of automobile insurance that covers the health care ...
  5. Unsatisfied Judgment Fund

    An amount of money set aside by certain states to cover uncompensated ...
  6. Preferred Auto Coverage

    Auto insurance offered to drivers considered to fall into the ...
Related Articles
  1. Options & Futures

    Beginner's Guide To Auto Insurance

    Find the perfect policy that suits both your coverage and budgetary needs.
  2. Insurance

    Car Insurance Rates Too High? Check the Record

    Your driving history is clean as a whistle yet your premium has shot up. Here’s how to find out why – and what you can do about it.
  3. Home & Auto

    6 Things That Spike Your Auto Insurance

    Several factors can cause your auto insurance to rise. Knowing what these are can help you find the best deal.
  4. Home & Auto

    Car Insurance Add-Ons That May Be Worth The Money

    Many auto insurance add-ons are unnecessary in most situations and will simply drain money out of your pocket. There are several that are worth adding on to make sure that you are adequately ...
  5. Insurance

    4 Types Of Insurance Everyone Needs

    Here are four forms of insurance that are vital to have.
  6. Insurance

    Will Filing An Insurance Claim Raise Your Rates?

    An accident can mean higher insurance costs - even if it wasn't your fault.
  7. Insurance

    What To Do When Your Insurance Company Won't Pay

    Struggling to get a claim honoured? Find out what you can do.
  8. Insurance

    How Car Insurance Companies Value Cars

    Learn the methodology used by car insurance companies to value cars, and understand why the amount they give you may not cover the cost of a similar vehicle.
  9. Home & Auto

    It's Raining Lawsuits: Do You Need An Umbrella Policy?

    This type of insurance protects your assets and future wages against lawsuits. Find out if it might benefit you.
  10. Insurance

    How Insurance Companies Detect Insurance Scams

    Insurance companies have full fraud detection departments tasked with both preventing scams and recouping money paid out for false claims.
RELATED FAQS
  1. How does the insurance sector work?

    Learn more about the insurance sector, a historically safe place for equity investors and the home of some of the largest ... Read Answer >>
  2. Why is accidental life insurance so inexpensive?

    Accidental life insurance is an inexpensive way of obtaining life insurance coverage for yourself or someone else in your ... Read Answer >>
  3. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  4. Can my insurance company refuse me coverage?

    Insurance isn't always as straightforward as other products. Insurers can deny coverage in many different instances:Non-Renewal ... Read Answer >>
  5. How are open market operations and monetary policy related?

    Understand the meaning of an aggregate limit in an insurance policy as well as which types of insurance companies are most ... Read Answer >>
  6. Why do growth investors buy insurance stocks?

    Discover why growth investors buy insurance stocks; these stocks are tied to major secular trends such as rising costs and ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center