Car accidents come straight out of the blue and even a slight fender bender could end up hitting you in the pocket. Even if you were not seriously injured as a result of the accident, insurance may or may not pay for repairs to your car in a timely manner.
What can you do if you find an auto accident has decimated your emergency fund, spiked your insurance premium, and left you holding a substantial bill?
Fortunately, there are some simple steps you can take to make sure a car accident doesn’t set you back months or even years financially.
Use Your Savings
The purpose of a savings fund is to help you confidently meet emergencies like the costs associated with a car crash.
If you don’t have a savings fund in place, consider starting one. While it won’t do you any good right now, it will give you more breathing space in the event of future emergencies. You could consider dipping into a retirement fund if you don’t have savings, but you would be liable for some heavy penalties and taxes. This form of financing might help you right now, but you would be worsening your situation further down the line.
For those with an emergency fund in place, now is the time to tap into it.
Leverage Your Insurance
You may find your car insurance will cover some or all of the following:
- At least part of your medical expenses
- Car repairs
- Rental car
- Lost wages
- Damages to the other party
If you have always been aggrieved about paying what you feel are high car insurance premiums, it’s only when you have an accident that you understand the full value of your insurance coverage.
To reiterate, having some form of an emergency fund is invaluable. Even if your savings don’t meet the full expenses you incur in an emergency, some form of financial buffer at least provides you with some breathing space.
Retain an Attorney
By far the most effective method of recovering most of the costs incurred after an auto accident is to file a personal injury claim.
After all, you will only occasionally need to deal with legal issues like this, while your attorney works with claims like yours all day every day.
If you are reluctant to retain the services of an attorney, consider the cost set against the knowledge and connections they have. If you file a personal injury claim with retained legal counsel on board, you are liable to secure superior compensation than by trying to go it alone.
A personal injury lawyer can guide you through the minutiae of the claims process, from handling witness accounts and liability waivers to interacting with the other party.
You could certainly file a personal injury claim without legal representation, but you are liable to end up with a bumpier ride and less compensation when your claim finally settles.
Most personal injury lawyers will charge on a contingency fee basis. You pay nothing upfront. Your attorney will get a pre-agreed percentage of your settlement if you win your case, and nothing if you lose.
If you are still struggling in the aftermath of a car accident that has left you reeling financially, crowdfunding is one option worth exploring.
There are many of these platforms from GoFundMe to JustGiving, and you could always try asking others for help if you have nowhere else to turn.
For anyone planning to take the crowdfunding approach, it’s worth taking the time first to fully understand how the platform in question works. You should also explore which campaigns are most effective so you can maximize your chances of financial relief. Beyond this, ensure you are aware of all the terms and conditions.
Legal funding goes by many names, including:
- Litigation funding
- Lawsuit loan
- Cash advance loan
- Legal cash advance
- Settlement funding
- Pre-settlement funding
This form of funding is a cash advance rather than a loan. You pay nothing upfront in exchange for a cash advance on your future settlement in exchange for a portion of that settlement.
As non-recourse funding, you repay nothing unless you win your case. This makes the investment riskier for the funding company, resulting in high interest rates that compound monthly. If your case takes a long time to settle, you could end up losing a large chunk of the final settlement if you take out the wrong lawsuit loan with excessive interest rates.
As long as you are clear on what lawsuit funding provides, it could help you to financially recover from a car accident, giving you some peace of mind when you need it most.
To qualify for a car accident loan, you need to have a personal injury lawyer, so you should speak with them before considering a lawsuit cash advance.
While your lawyer won’t advance you any money to deal with your current financial difficulties, they can advise you on the most effective route to getting the compensation you deserve, while meeting your bills along the way.