When most people imagine the costs of a car accident, they imagine the damage to the vehicle and rising insurance premiums. While both are true, there’s a lot more involved for both parties in both direct and indirect costs. Here’s what you need to know.
The direct costs of an accident are the easiest to identify. You can break them down into third party and first party losses. First party is anything that involves you, while third party includes all persons and property damaged as a result of the accident. That includes other drivers, cars, and anything private or public property.
These costs vary wildly depending on the accident. The extent of losses and injuries can quickly become astronomical, with future medical expenses and lifetime care only adding to the cost in extreme cases. However, these costs are only the tip of the iceberg. On average, direct costs come in anywhere between $7,500 and $61,000. That’s excluding fatal accidents. To help mitigate costs, you’ll need to hire an experienced attorney like this Mississippi car accident lawyer.
This is where things can really add up depending on the accident. Indirect costs fall into several categories, each with their own impact on your finances and life. The easiest to assess are fines and penalties for traffic violations, but others are harder to assign a dollar amount to.
The accident investigation and legal proceedings that follow an accident include everything from assisting insurance company representatives to the cost of an attorney. Keep in mind that insurance does not cover the cost of a criminal defense.
You also have to take into account any loss of revenue. You might not be able to drive to work due to the extent of damage to your vehicle, or you might find yourself in the hospital recovering from your injuries. Typical insurance policies do not cover revenue loss, either.
Another indirect cost is your insurance premium, which is sure to rise after an accident. From there, add on punitive damages from the court for willful, intentional, or malicious acts of reckless driving. Any punitive punishment is an out-of-pocket cost.
Finally, there’s your image. If the wreck makes it on the news, the negative publicity could cost you future income from potential employers. Even if you don’t make the news, your accident is still filed in your Compliance, Safety, Accountability or Safety Measurement System profile, which is easily viewable by potential clients and customers.
The True Cost of an Accident
Even though driver error is often the most common cause of motor vehicle accidents, there are situations in which an automotive defect can cause the accident or contribute to injuries sustained in a crash. When this happens, the victims of the accident may have the right to file a a lemon law or product liability lawsuit against the manufacturer of the car. While placing a price tag on these accident costs is challenging due to each accident being unique, they still add up to an incredibly large sum that will have an impact on your financial well-being. Your insurance may still handle a chunk of the cost, but your bank account and savings are going to take the brunt of it.
Keep in mind that more severe accidents are even more costly, with those that are fatal costing an average of one million dollars or more. If you’ve found yourself at fault or injured by another while driving, even in a minor accident, it’s always in your best interest to hire legal representation.