How to recover financially after a car accident
Managing your finances at a time when global inflation is at its apogee can be challenging. Add a setback like an accident to the mix, and one might find himself staring at medical bills, car repair or replacement expenses, including loss of income resulting from the mishap.
Car accidents can shake your finances, especially if you don’t have insurance. The best you can do is dust yourself up and begin the financial recovery process. We have highlighted how to go about that below. However, before we go into details, let’s look at the average cost of a car accident.
How much is the average cost of a car accident?
Car accidents can affect one physically, mentally, and financially. While the physical and mental aftereffects of accidents are often emphasized, the financial consequences aren’t always known.
Whether minor or severe, car accidents can wreak havoc on one’s finances. Minor crashes, for instance, can cost an uninsured driver close to $10,000 in expenses. On the other hand, serious car accidents can cost an uninsured driver around $100,000 and above.
Here is a roadmap on how to recover financially after an accident.
1. Use your savings
As a rule of thumb, it is required that you have some cash stashed in case of emergencies like leaky roofs, moving expenses, family emergencies, and car accidents. Car accidents are emergencies that may require you to spend a lot of money. If you have an emergency fund somewhere, it’ll come in handy. However, if you don’t, things might get difficult for you.
What if you don’t have any emergency funds but have a retirement fund? In that case, you may want to access the fund to ease your predicament. However, be ready to face some huge taxes and sanctions on the back of that, though. Plus, the money you are withdrawing can’t accrue interest until you return it. In the end, you’ll be making matters worse for yourself, so we don’t advise that you leverage this option if it can be avoided.
2. Leverage your insurance
Insurance can be your saving grace in the event of a severe accident. However, the degree of financial assistance insurance will offer you depends on your policy. Generally speaking, insurance can assist you to:
- Pay for car repairs or the value of your car before it is totaled
- Cover at least a portion of medical expenses
- Cover lost wages
- Pay a part of the cost of a rental vehicle
- Pay for damage you may have caused to the victim of an accident
After an accident, your road to financial recovery will be smooth if your auto insurance policy coverage makes sense. Therefore, we advise that you consider fully comprehensive car insurance to ensure that your finances don’t take much hit after an accident.
However, if you don’t have the funds to get such insurance, you can consider a third party or third party fire and theft. Whatever you do, ensure you get insurance, even if it isn’t a must in your state.
3. Get a lawyer
Let’s face it, on paper, car insurance companies are like a sweet, caring mother who seems to have your interest at heart. However, in reality, some of these companies don’t care about you; they only care about how much they make.
To ensure that you have someone who has your best interest at heart, it makes sense to retain the services of a personal injury lawyer specializing in car accidents. An injury lawyer is the real version of a caring mother or father. These professionals can fight for you to ensure that you get the right compensation for your injuries and losses, pain and suffering, emotional damage, etc. Having a good lawyer by your side will certainly boost your financial recovery post an accident.
4. Consider setting up a crowdfund
Times are hard. Coughing up a few thousand dollars to cover the expenses of a car accident may be difficult for some people. If you are one of those individuals, you may want to consider seeking help from others to cover some of your costs.
Platforms like GoGetFunding, Fundrazr, JustGiving, GoFundMe can be instrumental in your quest to ask the public for help. If you decide to raise funds via a crowdfund, ensure you take the time to choose a suitable platform. It also makes sense to understand the platform you are using, how it operates, what campaigns are ideal for your situation, plus the terms and conditions attached to the platform.
Conclusion
The aftereffects of a car accident can leave you with bitter memories. Aside from the trauma and injuries that follow such accidents, the costs of car repairs and medical bills can also weigh down on your finances. The best way to ensure that you bounce back financially after an accident is to leverage the tips highlighted above. Ensure you go with the option that suits your situation to get back on your feet in time.
