Well, state laws differ in this area. For the most part, the driver who rear ends is at fault. Secondly, I hope to God you have liability insurance (preferablly full coverage so u can fix ur car or at least get some money for it to replace it). If the old lady sustained injury (this is worst case scenario and if she's a bitch) then you might face a civil suit for her pain and suffering and all that crap. The good news, your insurance company should cover anything like that. Again, you must look into what your policy covers and does not.

You won't feel like this for too long (at least I didn't), perhaps a couple weeks. Don't worry, it happens. The most important thing is to make sure u did everything the right way (filed a police report and called your insurance agency, as well as exchanging info between drivers, it would be helpful if u asked her if she is ok (if she said yes then you can rebuttal any injuries she claims to have)).

I recommend you just relax, and get your mind over it. This stuff can take months to resolve. As long as you took all the precautions mentioned above, you should be fine. Remember to keep records for at least 2 years (statute of limitations).

Hope this helps....

EDIT: you may want to visit your state page website regarding the rules of the road and all that good stuff....it usually contains helpful information.