How a Car Accident Can Affect Your Finances

driving a car

A car accident can affect one’s life in many ways. There are physical effects; injuries that can last long after the accident is over or cause permanent damage to one’s health and well-being. There are also mental or psychological effects, which are often harder to heal from than the physical effects and cause the most damage in many victims. However, not a lot of people talk about the financial effects of a car accident, particularly just how devastating they can be.

Whether or not the accident is your fault, here are the potential financial effects that a car accident can bring to your life:

1. Legal fees

The only time you have to worry about legal fees is when you want to ensure fair compensation for an accident that was not your fault. This is often the case for car accident victims that are being offered or pressured to accept a low settlement, or if their insurance claim was denied unfairly altogether. If you feel that insurance companies are trying to take advantage of you, seek legal help from an experienced car accident lawyer right away.

2. Medical expenses

Usually, you will receive compensation for your medical expenses after an accident, especially if you are not the one at fault. But if the claim drags on, you will have to pay for the medical expenses out-of-pocket or let your own health insurance cover it (if you are covered for vehicular accidents). If your injuries are mild, medical costs may not be that big of an issue. However, if your injuries are severe or life-altering, the costs for hospital admissions, medication, surgery, physical therapy, and other treatments that you may need are most likely going to be high.

Moreover, if your injuries require you to stay at home, you would also have to consider the costs of home health care as well.

3. Vehicle repair costs

Your insurance company will likely cover you for some of the damage, but may not pay for the entire repair bill. If this is the case for you, you will have to pay for the balance, which won’t be a big problem if you receive fair compensation from the other driver’s insurance company (if the accident is not your fault). Again, insurance companies may not shell out money immediately, so if you rely on your car for daily transportation but can’t drive it the way it is after the accident, you will most likely have to dig into your savings for the repairs first.

counting money cash and coins

However, if your vehicle was totaled (damaged beyond repair), you will have to buy a new or used car, which will add another monthly bill on top of your other expenses. If you are lucky, the compensation you receive may be enough to buy another car so that you don’t have to pay for it on your own.

4. Lost wages

Many car accidents lead to both parties taking some time off work, whether it’s a few days or a few weeks. If your injuries are severe enough to require more than a week of hospitalization or recovery, you will lose a significant amount of wages, especially if you don’t have any sick days left.

In the worst cases, car accident victims are severely injured to the point that they would have to quit their jobs permanently, thus losing what’s likely to be their main source of livelihood.

5. Higher insurance premiums

If you are fully or partially at fault for the car accident, your auto insurance company may increase your premium. Unless the increase is insignificant compared to your income, it can definitely add a noticeable amount to your monthly expenses.

However, if you feel that the increase is unfair, especially if you are not entirely at fault for the accident, you can seek advice from a car accident lawyer to ensure that your insurance company is not taking advantage of you.

6. Other losses

Other things in your car may also become damaged in the accident. This may include phones, laptops, clothes, equipment, tools, and other things of value that were inside your car at the time of the wreck. If these things are essential to your everyday life, you also have to factor in the cost of repairing or replacing them.

A car accident can do more than just harm you physically and mentally. It can also throw your finances in for a loop. Nevertheless, there are a lot of ways you can minimize your financial losses after a car accident, and you can start by speaking to a reputable car accident lawyer that can help you obtain the compensation you deserve.

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