Did you know there were over 10 million road accidents in the United States each year? It’s an incredible number, and it also shows that your chances of being involved are higher than you might think. And, if you ever are in a car crash, it can have a grave impact on your life – and it could even end it.
Death and severe injury will have the most impact, of course. Nothing can compare to the agony of losing a loved one, and a spinal or brain injury can lead to a life that you are ill-prepared for. But dealing with this terrible aftermath also involves a big impact on your finances. We’re going to take a look at what you need to consider should you or your loved ones be involved in an auto accident.
Loss of income
First of all, you can expect injuries if you are in a car crash. It might result in time off work; that may not be paid. In severe cases, you might have to stop working altogether, if you end up with a disability. If this happens, you will need to look at getting social security disability payments, which can help. But, that money will only keep you a nudge ahead of the official poverty line.
Your health insurance should cover you for some of your medical treatment. But, you will also have to consider co-pays, which can add up quickly. Also, you may have to bear the brunt of many of the medical expenses, while your insurers go through your claim. If it takes a long time to process, you could end up in the hospital collections department, which can affect your credit score.
Your car will also need repairs after an accident to ensure it is still safe to drive. Yes, your insurer – or the other party’s – should cover the costs. But, you may not have the right insurance and it is possible you will need to pay for the work yourself. If there is a lot of damage, you may have to buy a new car – or hire one. All these costs quickly add up, and can put a severe strain on your personal finances.
Car loan payments
If you have a car loan – like many people do – and your car is totalled, it might cause you plenty of problems. Insurers will only pay out for what the car is worth right now – but what you paid for it. When you bear in mind depreciation, this can be quite a difference. Unfortunately, your lender will still expect their money, and you will need to pay it.
Of course, as soon as you are involved in a car accident, you become more of a risk to insurers. And that means they will charge you a lot more for the same services you used beforehand. You will also lose any good driver perks. It all depends on the level of damage that is caused – but the average price rise of auto insurance after an accident is over 40%. Again, that is going to affect most households when it comes to their outgoings.