Three car rear-ender.... police report puts car #2 at fault... Ins. puts 2nd & 3rd car at fault?

My sister was actually ithis exact same accident, she was car #2. She ended up having to pay for car #1's damage and car #3 had to pay for hers, all white confusing. In her situation, the law saw it as how it is stated in legal paper, whoever is in the rear is at fault. #1 may have stopped when they shouldn't have, but obviously #2 AND #3 were daydreaming or not paying attention or following too close, either way, regardless of whether #s 2 & 3 were expecting #1 to stop, they should have been the proper car lengths away to stop in time even going 70 mph, that's the whole point of requiring people to drive a certaidistance behind the other cars and it's why in driving Ed they tell students to always look 20 seconds ahead of you for accidents and always be 100% aware because no one can trust anyone on the road... It's best to assume that everyone is a horrible driver and to just keep your distance for your own safety.