A car accident can have far-reaching financial implications. Despite advances in safety technology, the National Highway Traffic Safety Administration estimates that car accidents continue to be one of the leading causes of financial hardships for many families.
Even when you have insurance, it might not cover certain costs. This puts victims under financial strain as they try to cover increasing medical costs and recover from any injuries they may have suffered. Some victims may also be unable to work following an accident leading to a loss of income.
The Economic Implications of a Car Accident
The NHTSA studies the financial implications of car accidents every 10 years. In 2010, the total economic cost of motor vehicle accidents was a staggering $242 billion. The agency also considered quality-of-life valuations bringing the cost of societal harm to $836 billion.
It is not uncommon for many accident victims to underestimate the value of a crash when it happens. Many drivers assume if all parties involved in the crash have insurance, it will be easy to settle any financial losses.
As a result, most accident victims settle for the first offer from the insurance company, which is usually far less than they deserve.
We have outlined the financial implications you are likely to face after an accident and why it might be a good idea to get in touch with a car accident lawyer before accepting any settlement offers.
Hefty Medical Bills
This is the most common financial hurdle that many car crash victims will face. If you are involved in a car accident or even a seemingly minor crash, you might sustain injuries requiring medical treatment. We recommend always getting checked after an accident, even if there are no obvious injuries.
Medical treatment typically has the greatest financial implications. This is especially significant if you suffer from injuries that require extended hospitalization, surgery, life-long treatment, medication, physical therapy, or ongoing care.
It is worth noting that if you or a loved one has been involved in an accident, it is best to consult a professional lawyer to get free advice on the next steps.
Also in line with medical bills are expensive living adjustments that you may have to make if you have suffered from an injury that leads to disability.
Victims may have to purchase assistive devices and make expensive home modifications to make them more accessible.
Remodeling costs include designs to modify the home to accommodate movement in, out, and around the house. You may have to adjust your shower, stairs, bathrooms, and workspace.
The insurance coverage may be limited, leaving you to pay for costly modifications out of your own pocket.
If you suffer serious injuries, you may need extended hospitalization. This means unpaid time off work and lost wages. If you sustain life-long injuries, you may also have to switch careers for less strenuous jobs, which might pay less.
When assessing the cost of lost income, a lawyer will calculate your average weekly or monthly earning, any training or education you have invested in to support your career, your level of experience, and the number of years you would likely have continued to work.
Combined, these figures increase your lost wages significantly.
Vehicle Repair Costs
Almost all accidents result in vehicular damage, however minor. The cost of repairs will typically be determined by the car’s pre-collision value.
However, it is safe to assume that you might end up footing significant repair costs, especially if your car has taken a beating over the years or suffered other mechanical issues before the accident.
Your insurance company may offer to cover the repair costs if they do not exceed the car’s actual cash value. Nonetheless, if the car’s actual cash value is less than the repair costs and salvage value combined, your car is deemed a total loss.
You will qualify for compensation matching your car’s current value. In most cases, you will still have to top-up the amount to get a similar or better car. Some insurance companies may also allow you to keep the totaled vehicle but offer a smaller settlement so you can repair the car out of pocket.
Higher Insurance Premiums
If you were at fault for the car accident, your insurance company will likely increase your premiums. Even a small increase to your monthly bill can cause financial distress, especially when added to your other expenses.
In some cases, your insurance company may still require you to pay a deductible where certain expenses are not covered. Depending on your insurance policy, it is best to consult a lawyer to determine whether you are eligible for compensation to reduce financial strain.
Alternative Transportation Costs
Even if your car only suffered minor damages, you may still incur additional costs of alternative transportation while it gets repaired. You may also suffer from unreliable transportation, which can seriously jeopardize your personal finances and even your job.
Loss of Service
Family members play different roles in supporting the family. Even if an accident does not involve the person who brings in an income, it can incapacitate a family member who offers a service such as childcare.
If such a family member is injured in a car accident, they can no longer offer their service to the family. This may result in extra expenses for outsourcing these services, such as hiring a nanny.
Hiring a lawyer is usually the best chance of getting fair compensation when you are involved in a car accident. If you do not hire a lawyer, insurance companies and other parties involved in the accident may try to take advantage of you by denying your claim or offering low settlements.
Hiring an experienced car accident attorney also comes with certain advantages. Most experienced lawyers work on a contingency basis and will not charge you any fees upfront.
Your legal fees will usually be a percentage of your settlement. This gives you the advantage of having an experienced lawyer taking up your case at no cost to you if you lose the case.