How to Financially Recover After a Major Auto Accident

Auto accidents can be physically, emotionally, and financially devastating, regardless of who’s at fault. Even if you’re found not at fault, and the other person’s insurance is supposedly handling the costs, you might get a perplexingly low settlement offer, pressuring you to cover the rest of the costs yourself. And if you’re the one responsible for the accident, you can bet your insurance premiums are going to skyrocket.

If you’ve been involved in a car accident, there are a few important steps you can take to financially recover.

Document Everything You Can

First, start documenting everything you can, from the moment after the accident. Even if the other driver seems apologetic and admits fault, there’s no guarantee their story won’t change in the future. You’ll need hard evidence that proves everything happened the way you say it happened. If you have a dash cam, collect and back up the footage as quickly as possible. If not, take photos and videos of both cars, all passengers, and your surroundings. And make sure you get a police report as well.

Your documentation doesn’t stop after the accident, either. If you go to the hospital, or receive any medical attention whatsoever, it’s important to document every bill you receive. It’s also a good idea to get multiple quotes for the repair work on your vehicle—or estimates on what your vehicle was worth, if it’s been totaled. This documentation will be useful if you have to negotiate with your insurance company.

Talk to a Lawyer

Next, if you’re not the one at fault, you’ll need to talk to an auto accident attorney. The at-fault driver might freely admit fault and refer you to their insurance company, but there’s no guarantee that this insurance company is going to compensate you adequately for everything. A personal injury lawyer will work with you to better understand the nature of the accident, and guide you on how to work with the insurance company moving forward. If necessary, they’ll help you negotiate for a higher payout, and in some cases, will guide you in taking further legal action to get you the compensation you deserve.

The real benefit here is guidance; a personal injury lawyer will evaluate your case and help you understand what to do next. Best of all, most personal injury lawyers offer the initial consultation for free, so you have nothing to lose by starting the conversation.

Negotiate With Your Insurance Company

After the accident, you’ll likely receive a settlement offer from your insurance company (or the insurance company of the offending driver). You might be tempted to accept this immediately, especially if it comes close to covering all your expenses. However, you’re often better off pushing back and negotiating for more—especially if the settlement doesn’t account for your ongoing medical expenses, or your subjective pain and suffering. If you can’t reach an agreement, you may need to take legal action to recover the full costs.

Again, this process is best handled with the help of a lawyer. They can negotiate on your behalf and help you understand your chances of victory at every step.

Consider Getting a Personal Loan

The settlement, negotiation, and legal processes that often follow an auto accident usually take an agonizingly long time to resolve. In the meantime, you’ll need some way to repair your vehicle, cover your medical expenses, and still meet your basic living needs. If you don’t have an emergency fund to tap into, your best bet is to get a short-term personal loan—possibly one contingent on your pending settlement.

What to Do If Your Insurance Premiums Rise

Of course, if you’re found at least partially responsible for the accident, one of the biggest costs you’re going to face is higher insurance rates. For the most part, this is inescapable; insurance companies need to charge rates according to risk, so if you’re found to be a higher risk than other drivers, you can generally expect to pay more. However, paying several hundred, or even several thousand dollars extra every year is a massive burden.

There are a few things you can do. First, you can try to negotiate your current rate. This tactic is rarely successful, but it’s worth a try. After that, you can start shopping around for other rates from other insurance providers. Some insurance carriers are more forgiving of accidents than others.

No matter what, your finances are likely going to suffer in the wake of a major auto accident. But if you proactively document whatever you can, push hard to get more from your insurance company, and (in some cases) take legal action, you can make yourself whole much faster.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.