Personal Finance

4 Ways A Car Accident Affects Your Finances

The first thing that most people think about when car accidents come to mind are physical injuries.  However, in addition to physical injury, a car accident can also have an incredibly negative impact on your finances.

Billions of dollars are lost every year as a result of car accidents in the United States alone.  

Even though it’s a blessing to walk away from a serious car accident still alive, you can still suffer from the financial damages that were caused by it.  Some people may suffer the financial implications of a car accident for decades. 

Here are some of the following costs you may be looking at after a car accident.

Lawyer Fees

If you got in an accident that was due to another driver’s negligence, then you should call a lawyer as soon as possible.  A lawyer will be able to guide you on the best way to pursue seeking compensation for your suffering.

Lawyers don’t come cheap, either.  They will require upfront costs, and until you win your case, you’ll need to have the money to pay for one.  In the event that you lose your case, then you’ll have lost the money that you invested in the lawsuit. 

Lost Wages

If your injuries are serious enough to require hospitalization and time off work, then you will lose your wages.  Depending on the length of your time away from work, you may suffer significantly.

If your insurance company doesn’t cover your injuries, then it could be financially detrimental having to pay for your medical costs on top taking a cut on your paycheck.

Increased Premium 

When you claim a car accident, even if you’re only partially to blame, your insurance company may increase your premium.  Even a little increase in your monthly bill can add up significantly over the year on top of your other expenses.  

Repair Costs

Assuming your car was damaged, you’ll have to pay for whatever repairs that your insurance company won’t cover.  In the event that your vehicle was totaled, you’ll have to pay for an entirely new car. Adding a monthly car payment to your budget may not be realistic.

Even if you have an emergency savings account put aside, chances are it may not be enough to pay for the cost of an entirely new vehicle.

As much as you might try to take the proper precautions against car accidents, there’s no telling when one can happen.  However, by doing your best to avoid them, you’ll decrease your chances significantly.

By being as prepared as possible, and putting aside emergency savings for situations like an accident, you’ll increase your chances of being better equipped financially.