How a Car Accident Affects Your Finances More Than You Think

Car accidents will always be bad, whether it’s a minor fender-bender or a high-speed collision, but the damage doesn’t end there. Car accidents are much worse than their immediate effects, and the failure to recognize this can leave victims poorly prepared for their financial impact. In many instances, a car accident can even drastically alter a person’s financial health and quality of life.

Besides the cost of repairing or replacing their cars, victims will also have to deal with upfront medical costs and recurring medical expenses depending on the severity of their injuries. Victims will also need to address indirect financial effects that are incidental to the accident. Some of these are:

Increase in Car Insurance Premiums

If you were found to have caused even a minor car accident, your insurance premiums are very likely going to increase, as your insurance company would mark you as a high-risk client. The reason behind this increase in insurance premiums is because insurance companies operate on managing risks.  They provide insurance in exchange for premiums collected from thousands of policy holders. The assumption of such a business is that the chances that policy payouts would exceed insurance premium collections is low.

If a client is more likely to have an accident, this means that the risk that the insurance company would have to make an insurance payout also increases. In order to offset the cost of a payout, the insurance provider would have to increase insurance premiums.

Loss of Livelihood or Income

Victims who sustained serious injuries often miss work for a few weeks or even months. Some injuries may even outright render them unable to perform their roles at work, which often leads to job loss.

Losing a job significantly hurts a person’s financial health, especially if the job is the primary source of income. It also lessens a person’s ability to cope with recurring medical costs as well as the basic costs of living. While they can simply look for another job, the problem is that if the injuries were severe enough to render a person unable to perform one job, it’s unlikely that they will be able to perform their functions at other jobs.

Civil Indemnities

Another factor to consider is if the accident resulted in death. The person found to have caused the accident will not only be obliged to pay damages, repair bills, and medical bills, and will also be liable for civil indemnities for having caused the death of a victim unless they have an indemnity insurance policy. The cost of civil indemnities may vary depending on factors such as indemnity history claims.

The financial effects of a car accident can significantly alter a person’s quality of life. It’s for this reason that it’s important to hire lawyers regardless of whether you’re a claimant seeking to secure full and just compensation for your injuries, or a defendant trying to protect yourself against undue liability.

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