A car crash can be financially, emotionally, and physically devastating for the victims. Apart from suffering from a serious and painful injury, you may be looking into dealing with vehicle repairs and following up on insurance claims. You may also be looking to file a lawsuit if the accident wasn’t your fault.
A collision will affect you in myriad ways, and paying for all the post-clash hurdles can significantly set you back financially.
How a Clash Affects You Financially
Medical Expenses
A car crash brings along various costs that include medical expenses and bills. These expenses can squeeze your savings dry unless you have good insurance coverage. The Progressive auto insurance reviews show that the company has various coverage options, which include the accidents you cause and medical bills.
Medical expenses vary wildly depending on the severity of the injury. You may pay for surgery, prescriptions, medication, counseling, and physical therapy. Tragic injuries such as traumatic brain injuries and severe spinal cord injuries can have lifelong costs that add up to tens and hundreds of thousands.
Lost Wages
Some injuries will be so severe to require hospitalization and time off work. At such a time, you lose out on the income you would have earned when productive at work. The losses can be huge depending on the time you need to recuperate. In the worst-case scenario, crash victims that suffer debilitating or severe injuries might have to stop going to work permanently.
Increased Auto Insurance Premiums
After a car accident claim, your insurance carrier may increase the premiums even in cases where you only carry partial blame. The average annual policy increase after a single clash is $637. Those with an accident on their record are considered high risk and likely to pay higher rates.
The small increase may seem insignificant but can add to huge bills over time. This increase and other expenses will significantly reduce your take-home cash.
Legal Fees
You may need representation to help with the claim. Hiring an attorney can speed the process and ensure you get just and fair compensation after the clash. In some cases, the legal representation may not be up to the task, accept a lowball offer, or deny the claim entirely. It pays to get a qualified lawyer who also enjoys a good reputation.
Vehicle Repair Costs
There may be some repairs that your insurance will not cover, so these will come out of your pocket. If the vehicle is totaled, you might have to buy a new or used car.
While you may get financing for the new ride, adding monthly payments to your already constrained budget can be costly.
How You Avoid Financial Devastation Associated With a Clash
According to the National Safety Council (NSC), the annual cost of vehicle crashes is $463 billion, and the cost of possible injury per injured individual is $25,300. These costs are quite high and can be devastating if you’re not prepared or when adequate help is not forthcoming.
Avoiding financial devastation after a collision is possible in various ways, such as:
Making Smart Investments
Investing wisely can provide the funds you need to weather the storm a collision brings. If you want to venture into real estate, you can explore the real estate investment trust (REIT), a great starting point to provide exposure.
REITs are firms with a basket of real estate ventures and finance properties and earn regular income through rent and leases. This is a good source of consistent income when recovering from the crash. As an investor, you purchase shares in a REIT and earn a dividend based on the investment made.
You can also purchase a property and lease it for a consistent income. But there are various ways you can become a landlord. For example, you can purchase a single-family home and find a tenant.
Invest in the Right Insurance Policy
An auto policy protects you from financial liabilities that accompany a crash. In most states, some coverages are mandatory, while others are optional.
The most common coverage includes bodily injury with a limit based on the policy taken. There is property damage coverage to cover the costs of repair for damage to other people’s property.
On the other hand, comprehensive coverage will take care of the damage to the vehicle caused by factors other than a collision.
Getting Relief
The cost of motor vehicle crashes is mostly covered by the parties involved. Sometimes, what you get is insufficient, and your savings may not be enough. Some organizations and parties can help with financial aid for your portion of the collision.
For your runaway medical expenses, facilities such as Hill-Burton Facilities are obligated to provide free or reduced fee services in exchange for federal funding. Those eligible for Medicare can use Medicare Savings Programs for help with deductibles, copays, medical expenses, and patient care. If your insurance is inadequate, you may qualify for the HealthWell Foundation to help with out-of-pocket hospital costs, premiums, and medical debt.
Some organizations and programs provide financial assistance, such as the Federal Communications Commission (FCC), to assist with utility bills. Sometimes, the collision may result from a natural disaster, in which case you may be eligible for federal assistance from the Natural Disaster Emergency Relief.
Avoid Pitfalls When Borrowing or Requesting Assistance
Often, there will be a pressing urgency that pushes individuals to make unwise financial decisions, pushing them further into the financial abyss.
Some options, such as withdrawing the retirement fund, may seem attractive, but it carries hefty penalties and fees when withdrawn prematurely. Credit card withdrawals also seem like a quick way to access emergency cash, but the option comes with high fees that raise your debt to new levels. The rates for Payday lenders where you get cash advances against your coming paycheck can have rates of up to 1,000%.
Exhaust all the options available before you take the route to borrow. Explore the various federal and nonprofit and private support options, but stay vigilant of scams. Fraudulent grants risk your identity and any remaining cash you may have. If the grant seems too good to be true, dig deeper before you provide any information.
Financial devastation can happen after a crash through high medical bills, legal fees, repairs, and loss of income. But you can avoid this through various strategies such as smart investing, applying for relief, and avoiding the mistake of borrowing unwisely. More importantly, make sure that you’re paying.
