Financial Distress: How Car Accidents Cause Hardship
From costly medical bills to car repairs, and hiked insurance premiums to gaps in employment, car accidents can wreak havoc on a person’s finances. Though injuries may appear to be the most severe effects of a car accident, often the costs incurred have a greater, more detrimental impact on the survivor’s life.
Depending on the severity of the accident, someone injured in a crash may walk out of the hospital with a trail of bills following close behind. Statistics from the United States Census Bureau reveal that a total of 27.5 million Americans had no health insurance in 2018. For the millions of US citizens living without health insurance, a car accident could mean a major financial blow from which they would not soon recover.
Similarly, those living without car insurance, representing approximately 13% of drivers in the US, will be saddled with bills coming from their mechanics following a serious accident. For some, it might be easier and cheaper just to purchase a new car rather than pay for the repairs after a major car crash.
Inability to Work
Compounding the costs associated with car accidents, a crash can greatly limit a person’s ability to travel and therefore stunt his or her work schedule. Even if a job paid enough so the crash survivor could pay back his or her hospital and repair bills, if the car is damaged beyond use, he or she has no immediate way to earn a living. Unless someone has a sympathetic employer who is ready to support him or her throughout this struggle, he or she will have to look for other sources of income.
People are often unaware of how reliant they are on their vehicles until they lose the ability to drive. Aside from missing work, people without a car may struggle to:
- Get their kids to school
- Go grocery shopping
- See friends and family
These are all normal parts of day-to-day life that, if not maintained, make it difficult for individuals to manage a comfortable existence. The loss of agency from losing a car creates immeasurable personal and professional costs. The combined weight of all these concerns makes it difficult for people to get back on their feet after a life-altering car crash.
Some people in an accident may face a hike in car insurance premiums. This lasting problem could cost people thousands of dollars long after the crash occurred. However, whether someone does have to pay higher premiums depends on a few factors, including the insurance provider, the cost of the claim, and the facts surrounding the accident.
Depending on which state the accident occurred, the policyholder’s premiums may increase no matter who was at fault. Some states, however, prohibit insurers from increasing premiums for drivers involved in no-fault crashes.
People who get into a car accident may also find themselves in a protracted, expensive legal battle. If one driver were to file a personal injury claim against another driver and win the case in court, the losing party’s damages could get steep.
Everything that the winning party lost in the accident, such as hospital bills, wages, car repair bills, court costs, all could become the responsibility of the defendant. Of course, these vary from case to case. However, on some occasions, the costs could be so high that the losing party has no choice but to try filing for bankruptcy to remedy the situation.
When people hear about auto accidents they may assume the most negative impact is on survivors’ bodies. However, often it is the victim’s wallet that takes the greatest hit. Going through a car accident can put a tremendous strain on an individual’s finances. Whether it be car repairs, hospital bills, court costs, insurance premiums, or any of the other many fees that get attached to these incidents, car crashes can create a financial black hole for victims.