Despite the advancements we have made in car safety technology, accidents continue to happen on our roads every day. A car accident can have serious financial implications, ranging from the direct costs you might have to cover after the crash to indirect costs such as loss of income.
While a car accident can wreck your life physically, emotionally, and even mentally, it can also cause major financial damage. Even if the car accident was not your fault, you still have to consider filing a lawsuit, which means you may lose working hours to spend time on your case.
As a general rule, the more serious the accident, the more expensive it is, which is an unfair burden on victims. Here are more ways in which a car accident can affect your finances.
Medical Costs
After a car accident, medical costs are usually the most direct financial implication. There is no way to tell the extent of your injuries unless you have a doctor assess them and give a professional opinion.
Even if you are not hurt, you may still have to pay out of pocket for medical checkups to determine that you do not have any internal injuries. In the worst case, if you are hurt, you may suffer catastrophic injuries, such as
- Severe spinal cord damage
- Brain injuries, and more
Treatment for these injuries can range from hospitalization and counseling to occupational and physical therapy. There are also additional costs of alternative transportation, home care, and vehicle modification.
Your insurance may be able to cover these costs, however, some medical facilities will require you to pay cash while you wait for your insurance to kick in and these costs can add up to tens of thousands.
Remember, if your injuries are so extensive that you cannot work, you are also losing money in lost income, which will only further strain your finances. Always look for an experienced injury attorney to get a better sense of how a car accident can impact your finances.
Vehicle Repair or Replacement
Almost all car accidents will result in some vehicular damage even if it is a small crash. In a major accident, your car might suffer mechanical damage, electrical damage, or in the best case, minor dings and dents.
These damages severely impact your finances, especially if you have an older vehicle, as repairs are usually based on your car’s pre-collision value. If the repairs cost less than your car’s value, insurance may be able to cover it.
However, if the cost of repairs exceeds its pre-collision value, your car is considered a total loss. This often means you have to replace it and while insurance may be able to compensate you for some of its value, you will still have to dig into your pockets to buy a new car or make monthly car payments.
Legal Fees
When a car accident occurs, the insurance company and other entities will try to take advantage of you and convince you to accept a low settlement or even abandon your claim. Hiring a lawyer to help you file an injury claim ensures that you receive fair compensation.
It goes without saying that hiring a lawyer will cost you money, however it is a good investment. Even if you were at fault, hiring a lawyer ensures you get the best outcome, including avoiding jail time and hefty fines.
The good news is that most personal injury attorneys only charge a contingency fee, which means your legal fees will come out of your settlement, so you do not have to pay any fees from your pocket. If you lose, you should not owe your lawyer any fees.
Insurance Deductibles
An insurance deductible is an amount that you are responsible for in case of an accident. Often the higher your deductible, the lower your insurance premiums. In some states, the insurance company has a set deductible amount, while in others, you are allowed to choose.
In case you are involved in a collision, you will have to pay the insurance deductible out of pocket. For instance, if your insurance deductible is $500, you will have to pay $500 towards any vehicle repairs that your car needs after an accident.
Mediation and Arbitration Costs
After a car accident, both sides may agree to mediation or arbitration to come to a settlement out of court. This often comes at a cost and can often run into thousands of dollars, depending on your case.
Increased Car Insurance Premiums
When you file a claim with insurance, you become a liability to the company even if you were only partially to blame. Your insurer may add to your monthly premiums to reduce their risk in case you are involved in another accident.
Even if another motorist was at fault for the accident, your insurer is likely to charge you more in premiums after an accident. A small increase to your monthly installments adds up to a significant amount when you include other household expenses.
Depending on the circumstances affecting your case, we recommend shopping for a new insurer and comparing quotes before renewing your policy. In most cases, you can save money by switching insurance companies and most will even offer you a discount for buying a new policy.
Lost Wages
Another major economic impact that you might suffer as a result of a car crash is lost wages. In some cases, if you are involved in a car crash, you may be hospitalized and unable to work. Depending on the extent of your injuries, you may have to stay away from work for a long time, which can significantly impact your finances.
In the worst case, some car accidents may result in complete debilitation, which renders drivers unable to work for good.
Summary
Every year, car accidents result in damages worth over $871 billion. These expenses include lost wages, vehicle replacement, medical expenses, and higher insurance premiums, among others.
Often, car accident victims make the mistake of accepting a low settlement without considering future damages such as ongoing medical care and lost earning capacity. Overlooking these future expenses can take a huge chunk of your savings and even drive you to bankruptcy.
If you are ever involved in a vehicle collision, the smartest decision to make is to talk to an experienced attorney. Most personal injury lawyers offer free consultation and even work on a contingency basis, meaning you will not have to pay any fees upfront.
Get in touch with a personal lawyer to ensure you get fair compensation.
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