Car accidents are a sad reality of life on the road–virtually everyone will be affected by one at some point in their lives. When it happens, initial anxieties are often about vehicle repair and medical bills. However, that is just the surface. Other car accident-related expenses pop up, and they can be rather serious. Understanding these hidden expenses is important in financial planning and recovery.
Increased Insurance Premiums
One of the first hidden costs that might surprise victims of accidents is an increase in insurance premiums. Your insurance rates can rise—even if the accident is not your fault. Insurance companies often view any involvement in the accident as a potential risk, and increased premiums are a result.
For instance, according to one study by InsuranceQuotes, one single claim of $2,000 and up could result in an average premium spike of 44%. This would be hundreds, if not thousands, of dollars more over a number of years. After a minor fender bender, an annual premium can go from $1,200 to $1,800, costing you an additional $3,000 over five years.
Unemployment and Employment
Injuries from car accidents can result in taking considerable time off from employment, and victims lose quite a lot from wages. For some, their quality of life is damaged in a more profound sense than the mere loss of immediate income. Potential promotions and work experience from time lost from work may hurt one’s upward mobility in one’s career.
Legal Expenses and Settlements
Court cases that ensue after a car accident come at very high costs, and they are often very long. Even if one is settled out of court, it is still very expensive. Legal fees, court charges and compensation awarded to specific cases are very expensive. According to the Insurance Information Institute, the cost of a personal injury claim from a car accident is about $20,000 in any given average country, although the figures can differ. A liability dispute can cost you thousands before arriving at a settlement, affecting potential savings and adding financial stress.
If you’re involved in an accident, it’s important to find an auto accident lawyer in Louisville KY who has your best interests at heart.
Emotional and Psychological Costs
The emotional and psychological effects a person may have after a car accident can be colossal, often needing professional help to be overcome. Treatment for conditions like post-traumatic stress disorder, anxiety, or depression that may arise from the incident may be a very important but expensive part of recovery.
Therapy can cost a good sum, including mental health treatment for actual therapy sessions, medicines, and so on, in the range of $100 to $200 per hour. Therapy can cost thousands of dollars, especially when it’s not covered by insurance.
Vehicle Depreciation
Even if a car is completely repaired, the resale value of the car usually goes down by a large percentage because of the history of the accident. Most buyers do not want to buy a used car with a history of problems and thus may offer very low offers. In fact, reports from Carfax claim that an accident could cause a car to lose up to a 20% share of its market value compared to a similar car with a clean history.
For example, if your car was valued at $20,000 before getting it into an accident, after repair, the value could drop to $16,000, implying a loss of $4,000 just from depreciation.
A car accident doesn’t just cost you immediate repair and medical bills; apart from that, there are many hidden costs. A car accident puts a financial burden on individuals in terms of an increase in insurance payments and deductibles, lost wages, legal costs, emotional pain and suffering, psychological discomfort, and depreciation in the handling of the vehicle. Knowledge and preparation in these costs help you navigate the situation more effectively and pave the way for a more solid financial future.
