Having lost my car to engine failure last month, car issues have been on my mind. In my case, I didn't lose my car because of an accident, but I know just how stressful suddenly not having a car is. And I've been in a bad car accident a few years ago in a rental car and I know how difficult it is in so many ways, financially, emotionally, etc... I hope you are never in a car accident, but in case you are, here are some things you need to know about the financial aftermath.
Getting in a car accident can be truly life-altering, and one of the greatest and most far-reaching impacts they can have is on your finances.
The aftermath of a car accident (especially a more severe one) touches so many facets of your life. From medical bills to paying for lawyers and even purchasing a new vehicle – there’s a lot of spending involved, whether you were at fault or not. If you’ve been in an incident recently and want to start thinking about the long-term costs and how you might be impacted over time, here’s what you need to know.
Immediate Financial Impact
Starting off with the initial hit, which you’ll face directly after being in a car accident. Initially, you’ll probably only be faced with medical bills. If you’ve been seriously injured, you’ll need to be admitted to hospital, and depending on where you live and what insurance you have, etc., you might need to pay those costs up front. However, you’re able to claim compensation, you might be able to get this money back.
Another financial knock that you’ll face directly after the incident is the cost of the damage to your car. If there’s any serious damage, you’ll need to have the vehicle repaired or even buy a new one. However, this can also be mitigated by insurance or claiming for compensation.
Legal Considerations
If a car accident is serious enough, there are often legal implications, which is why it’s always a good idea to be in touch with a good car accident lawyer in Phoenix or whichever area you’re living in.
If you’ve been injured, you can file for a personal injury claim with the assistance of a lawyer. However, you’ll need to consider that there will be legal fees involved in this. On the other hand, if you’re found to be at fault, you might need to consider lawsuits and other fees related to this.
Insurance Coverage
Landing up in a car accident is when you truly realize the importance having good car insurance. If you have the right policies in place, this is what will protect you from having to fork out serious funds from your own pocket for a broken car, buying a new one, or even paying for the damage to the other party’s vehicle.
It’s not only car insurance that will pull you out of trouble in these circumstances, either. Health and disability insurance can also play a major role in protecting you financially when you’re in medical trouble. Huge hospital bills could put you into debt for years if you don’t have the right policies in place, and disability insurance can assist you in the aftermath of any long-term injuries you sustain.
Lost Income and Wage Replacement
Unfortunately, the buck doesn’t stop at just medical bills and fixing up your vehicle. If you’ve been seriously hurt, there’s a chance that you won’t be able to work for an extended period of time, potentially losing income and job stability because of it.
In these cases, disability insurance can once again play a role. However, the extent of your injuries, the amount of time you’ll be unable to work, and the nature of your policy will all determine how much money you’re able to claim. If the accident was someone else’s fault, you may be able to claim for lost wages in with the assistance of a personal injury lawyer.
Non-Financial Consequences
With all this talk about money, it’s important to take a moment to remember that that’s not all that matters. Car accidents can impact people far beyond their bank accounts, and these non-financial consequences are sometimes the most difficult to process.
Alongside the financial blow, you’ll also likely be dealing with emotional shock and even trauma. Even if you’ve survived the car accident, there may be people in your life who did not, or who have suffered life-altering injuries as well. Additionally, adjusting to an altered quality of life after sustaining a lifelong injury can be a lot to process mentally, too. Grieving and processing these events is crucial and can even come with their own financial impact in the form of counselling and therapy.
Financial Planning
Insurance policies are already financial burdens that nobody likes to pay. Even so, it’s a good idea to put extra money aside in case of a car accident. Aside from this, there is no real way to plan financially for the aftermath of an accident before it happens.
However, after the incident, coming up with some kind of financial plan is a good idea. This is something that should be handled once you have a rough idea of the total costs, both upfront and ongoing. Consider recurring medical costs involved in your recovery, how you’ll account for time off work, etc. Having a solid plan in place will help you manage your finances going forward and avoid additional strain.
Financial Recovery
If the accident has been a major financial blow for you, you might have had to use up all your savings, or even gone into debt to help you pay for medical bills, car repairs, legal fees, etc. This can be incredibly stressful and straining, but having a financial recovery plan in place will help you get back on track.
Start by checking in with your insurance companies and an experienced lawyer to find out whether or not you will be able to claim any money back. Next, consider how you might adjust your existing monthly budget to more easily account for paying off debt, rebuilding your savings fund. Car accidents can also affect your insurance premiums, which means that this might be another adjustment you will need to make to your budget.
Final Thoughts
While all this seems daunting, know that with proper planning, consideration, and care, the financial implications of a car accident can be effectively managed. Recovery from even the biggest blows is possible. Working with professionals who can assist you – such as experiences lawyers and even financial advisors – is a good step to take if you are uncertain.