Car accidents often affect victims physically, psychologically, and financially. Unfortunately, many people only give weight to physical pain and don’t realize the financial losses immediately.
The truth of the matter is that every car accident causes not only pain but also a lot of economic losses.
Medical expenses, lost wages, and car repairs are just a few financial implications that arise after a car accident.
Whenever you get into an accident, your finances suffer the most. Getting back on your feet after nursing your injuries, getting the car repaired, and returning to work, all require money.
This article discusses how a car accident can affect your personal finances and how to recover financially.
Expenses That Result from Car Accidents
Some of the expenses you’ll likely incur after suffering a car accident include the following:
1. Medical Expenses
Once you’re involved in an accident, the next thing you need is a medical checkup, even if your injuries are not so severe.
Your doctor will evaluate you to see if you’re okay before giving you a clean bill of health. Even with a mere checkup, you’ll have to pay some money.
For severe injuries, you will need immediate medical evaluation. You might even need to stay in the hospital for several weeks to recover fully. The amount you’ll spend on medical expenses will depend on the severity of the injuries.
Other accident victims end up needing lifelong medical care and assistive devices for their catastrophic injuries. This type of care is not cheap, and the expenses can add up to hundreds of dollars over time.
Without health insurance, treatment, follow-ups, and rehabilitation can take a toll on your finances. Even with insurance, medical expenses will still be the biggest expenses following a car accident.
2. Lost Wages
If you’re injured in an accident, you’ll less likely be able to go back to your daily routine and live your life as normal.
Whether you run your own business or are employed, you’ll not be able to go to work for some time. Not being able to work means not getting any income.
If your injuries are so severe that you have to stay in hospital for several months, your losses would be enormous. In the worst-case scenario, you might quit your job because of incapacity.
3. Vehicle Damages and Repairs
Your car also gets hit in an accident and needs repairs, which can be costly. If the accident is so bad, your vehicle may be totaled, which means losing one of your most valuable assets.
Losing your vehicle in an accident can add to your expenses as you’ll have to find alternative means of transportation.
Whether you hail a cab, use public transport, or buy another vehicle, all these will still amount to costly expenses.
4. Increased Insurance Premiums
Even if you have a car insurance policy, it may not cover certain expenses related to the accident. You may still have to pay a deductible, depending on the type of policy you hold.
If you’re at fault in the accident or you’re partially to blame, your insurance provider will increase your premium.
Even the slightest increase in your auto insurance premium will still mean a lot, considering you still have other expenses to worry about.
5. Legal Fees
If you’re at fault in an accident, you will need to hire a lawyer to represent you. Even though this will help reduce the amount you’ll use to settle the victim, you’ll still need to pay the lawyer.
If you’re not at fault, you’ll need to file a claim to receive compensation for the accident. This process is not usually easy, especially if you don’t have any legal knowledge.
Insurance companies will take advantage of you and might not pay you the amount you deserve.
Hiring a lawyer will ensure you get a professional to fight for your rights. They’ll negotiate with the insurance provider so that you can get a fair settlement.
Regardless of the benefits, hiring a lawyer comes at a fee and can add up to your total expenses after the accident.
How to Recover Financially After a Car Accident
Physical recovery following an accident is usually more important than financial recovery. If you can gain full recovery, you’ll have the strength to get back on your feet financially.
Here are some ways to recover financially after an accident.
1. File a Personal Injury Claim
Don’t wait until you recover to file your personal injury claim. Remember, there’s a statute of limitation, and the more you wait, the less your chances of getting compensated.
Getting a personal injury settlement will help you recover some of the expenses you incurred after the accident. The settlement will cover your medical expenses, lost wages, car repair costs, and other noneconomic losses.
2. Go Back to Work
If you recover your strength back and are in a position to do what you used to do before the accident, then get your job back.
Going back to work will help you recover your finances and also keep your mind busy so that you can forget the traumatic events of the accident.
However, don’t push yourself too hard if you still feel weak.
3. Minimize Your Expenses
After spending so much due to the accident, you have to watch your expenses and cut out those unnecessary ones. Even if you received your settlement from the personal injury claim, you’d still need to watch how you spend, so you don’t run out of money before your recovery.
Make significant lifestyle changes so you don’t end up bankrupt. If your car was totaled, don’t buy a new one until you can afford one.
4. Check Your Credit
Now is not the time to get into debt trying to cover all your expenses. Instead, work on building your credit so that the incident doesn’t affect your creditworthiness.
If you have existing loans, call your creditors to explain your situation. The worst thing you need is to have your creditors on your back while you’re struggling with other expenses from the accident.
You can work together with your creditors to set up a plan for your monthly payments. You’ll build a good relationship with your lenders if you’re able to make small payments instead of missing out completely.
You’ll also maintain a high credit score and be able to borrow at a low-interest rate in the future.
Many car accident victims underestimate the financial implications of the accident and only think about physical recovery. Even if you recover physically, it will be difficult to gain psychological recovery if you end up in debt after the accident.
A car accident can take a toll on your financial health, even if you get a personal injury settlement. Know all the expenses you’ll incur after the accident, such as medical bills, lost wages, and car repairs.
With this knowledge, you’ll be more prepared to deal with them even if you don’t get your personal injury settled.
With the right measures in place, you can still recover financially after a car accident and live your life normally. The accident should not throw you off balance financially if you know how to keep your expenses in check.
You can recover your finances and rebuild your life without going into debt or declaring bankruptcy.