If being in an accident isn’t frightening enough, the expenses that follow can be even scarier. The average cost of a car accident in just collision claims alone was $3,144 in 2013.
Unfortunately, that isn’t the only expenditure you should expect after you’re in an accident. There are some things you just can’t avoid paying. Here are the potential costs that you’ll face after a car accident:
1. Car Damage and Replacement
The most obvious car accident cost is repairs and replacement–most accidents result in one or the other, with the latter being the most costly.
Car repairs can get confusing, as there are multiple factors involved. In order to figure out which party is responsible for paying, these questions will be considered:
- Do both parties have insurance?
- What type of insurance is it?
- How old is your car?
- Whose fault was it?
You won’t face the brunt of the amount if both parties have car insurance and the accident wasn’t your fault–your insurance or the other party’s insurance will cover it for you. However, you’ll still be responsible for paying the deductible.
When you don’t have car insurance or you caused the accident, you’ll have to pay pricey out-of-pocket expenses. In this case, the only ways you can try to save some money is to bring your car to a mechanic with reasonable prices. Otherwise, you might have to tap into your emergency savings.
The best case scenario is that your car makes it out of the accident with only minor damage. How will you get around while you’re waiting for your car in the shop? This is where borrowing a friend’s car, carpooling, using public transit, or using a spare car comes in handy, as you can save yourself from paying for rentals.
Maybe your accident was severe, and your car has major damage. Totaling your car means that you’ll be on the market for a replacement. The price of leasing a car or purchasing a new car is another cost that can cause huge financial issues after an accident.
2. Medical Expenses
Injuries, deaths, and suffering due to car accidents cost the United States $594 billion in 2014. That being said, medical expenses can definitely wreak havoc on your wallet if you don’t have the proper coverage.
Even the most minor accidents can warrant an ambulance ride to the emergency room. Hospital admittance, medication, staying overnight, surgery, and more all go into the average cost of car accident medical bills. Luckily, your insurance or the insurance of the person who caused the accident should cover some of your medical bills.
It’s not uncommon to wind up with a broken bone after a car accident either. Visit Julie Johnson Law for more information about what procedures go in the average injury-related hospital bill.
You should also be aware that most insurance companies don’t usually cover massage therapy, chiropractor or physical therapy appointments. So if you find yourself suffering from an achy back after your accident, you’ll have to pay full price for relief.
3. Higher Insurance Premium
Your insurance won’t let you off the hook for an accident. As if paying the average medical bill isn’t enough, your insurance punishes you even more by increasing your premium.
You can get around rate hikes by not filing a claim, but this should only be done in specific circumstances. For example, it’s not worth filing a claim if you don’t have collision coverage and you dent or damage your own car. It’s best to file for a claim when another driver is involved, or else you could end up paying more than you expected.
If you must report the accident to your insurance and you’ve had a clean record other than this minor accident, your insurance might not raise your premium by much.
4. Missed Work
Most people don’t think about missing work as one of the consequences of a car accident. Missed work results in lost wages, which means you’ll have to struggle even more to pay medical bills and car repair costs.
Your ability to get to work on time can be affected by a car accident, especially if you were on the way to work when it happened. It can even result in missed days of work due to doctor’s appointments, lawyer visits, court appearances, hospitalization, and severe injury. Your work productivity can also be impacted, as it can be harder to do a physical job when you’re suffering from injuries.
Certain car insurance companies will pay you back for the days of work that you missed, as long as you didn’t cause the accident. In order to file a wage loss claim, make sure to get a doctor’s note with detailed information about your treatment, along with verification from your boss on how many days of work you missed. Don’t forget to include a police report as well.
5. Car Loan
You still have a loan out on your car, and you just totaled it. Since insurance only pays the amount that your car is worth during the accident, you could end up spending thousands of dollars to pay back your loan.
Let’s say you owe $15,000 on your car loan, and your vehicle is currently only worth $10,000. Your deductible is $1,000, which means that your insurance will cover $9,000. In the end, you’ll be stuck paying an extra $6,000 for your loan.
To avoid this issue, you should consider gap insurance. This is especially helpful if your car is worth less than the amount of money that you owe on your loan. This way, you won’t have to pay the gap between the two amounts if your car gets totaled.
Coping with the Average Cost of a Car Accident
Car accidents can be physically and financially debilitating. The average cost of a car accident isn’t cheap–your bank account will suffer even more if you don’t have any car insurance, and if the accident was your fault.
While you might not want to think about getting into an accident in the future, it’s always good to be prepared. Having a little extra money in your bank account can help pay for any expensive bills. Check out these stress-free money saving tips to learn more.