Last Updated on February 5, 2024 by John Robinson
A car accident can significantly affect your life in many ways. You may lose time from work, have to replace essential possessions, and incur medical expenses. In addition, your car may become inoperable, impacting your ability to get around.
Unfortunately, many people are not always prepared for the financial consequences of a car accident. As a result, they find it challenging to cater to all the necessary expenses when faced with such an unexpected situation.
But it doesn’t have to be that way for you, as this article explores several common financial implications you may have to deal with after a car crash.
Depreciation in the Car’s Value
Your vehicle’s value before an accident largely depends on its make, model, age, and maintenance record. However, after an accident, it is likely to depreciate significantly due to the damages sustained.
Insurance companies often rely on aftermarket parts instead of original equipment manufacturer (OEM) parts to repair most damaged vehicles. Unfortunately, these parts may lower the car’s resale value since they are not as durable as the original components.
However, if your car depreciates after an accident, you may qualify for compensation from the at-fault driver’s auto insurer to cover the diminished value. Your attorney can help you calculate the vehicle’s lost value and include it in your claim.
Insurance Premium Hikes
Car insurance premiums are usually calculated based on several factors, including age, driving record, type of car, and even the location of your auto body shops. However, an automobile accident may adversely affect all these factors, increasing premium costs.
The reason for the insurance premium hikes is that most auto insurers categorize motorists involved in car accidents before as high-risk drivers. That means that the chances of you causing another accident and making a claim in the future are high.
A hike in your insurance premiums could be significant and cost you thousands of dollars. If this burden becomes too much for you, try shopping around for insurance companies with competitive rates for drivers with fewer crashes on their record.
Medical Expenses
A car accident may leave you with injuries that require medical attention. Unfortunately, these injuries can be quite costly to treat and may require multiple visits to the doctor or specialists.
While health insurance can help cover some medical expenses, you may still be required to pay a portion out of pocket. This can pose a significant financial burden to you and your family.
Victims with catastrophic injuries, such as traumatic brain injury or spinal cord damage, can suffer lifelong costs as they may need ongoing medical attention. These expenses could add up to tens of thousands of dollars annually.
Lost Wages
You may have to spend significant time under medical care if your injuries are severe. As a result, you may miss work for an extended period, resulting in lost wages.
Your losses may vary, depending on how long your injuries keep you from work. In severe cases, victims who sustained debilitating car accident injuries may have to stop their jobs altogether.
Fortunately, if the other motorist was at fault for the accident, you may be entitled to compensation for lost wages as part of your claim. However, ensure you consult an experienced car accident lawyer to determine whether this is an option in your case.
Vehicle Repair Costs
After a car accident, your vehicle may incur damages such as dents and scratches from the impact or road debris. You may also have to replace essential components of the car, such as headlights, windshield, and bumper.
Though your auto insurance company will cover the cost of these repairs, you are still likely to incur out-of-pocket expenses. For example, you may need to rent a car while your vehicle is being repaired.
If your car was totaled, you might have to acquire another one. Even with financing, you will still have to pay an upfront deposit and monthly payments for the rest of the loan term, affecting your budget.
