Hidden Costs After a Car Accident: Beyond the Insurance Payout

After reviewing 2023 crash data, the National Safety Council estimated that car accidents resulting in injuries and deaths cost drivers, passengers, vulnerable road users, their loved ones, and others almost $514 billion that year. Common costs included lost business revenues and employee wages, medical expenses, property damage, and vehicle repairs and replacements. Yet, these examples weren’t the only bills. Read on to learn more about the role of insurers after a traffic accident and hidden out-of-pocket costs.

Why Isn’t Insurance Enough?

When an insurer approves a claim, the amount it pays usually depends on fault, the policyholder’s coverage plan, and state requirements. A driver must have a minimum amount of liability coverage based on their state of residence. Their state might also require extra coverage, such as a personal injury protection (PIP) plan, or waive requirements based on the person’s ability to financially cover costs, the remoteness of a geographic location, and other factors.

The insurer tries to keep their costs to a minimum, which means they won’t cover anything that isn’t explicitly stated in the policy. If an accident happens in an at-fault state, the insurer for the at-fault party or parties pays the claim. In states that look at percentages of fault under a comparative negligence rule, multiple insurers might pay. In no-fault cases, or when a driver performs a hit-and-run or doesn’t have insurance, the PIP policy provides coverage. 

No matter who approves a claim, insurers don’t always provide enough money to cover all costs, especially if the policyholder didn’t invest in special coverage for hidden costs not included in a standard policy via an endorsement or rider. Additionally, hidden costs don’t always become apparent immediately after an accident and pop-up months or even years later.

The Most Common Hidden Costs

A car accident can cause both immediate and long-term financial, mental, physical, academic, employment and even social devastation. For example, without extra special coverage, any person affected by this type of accident might have to pay out-of-pocket vehicle towing and rental fees. If they must repair or buy a vehicle or pay for a new title or registration, an insurance policy might only cover part of the bill. With repairs, they also suffer a “cost” from the money they lose in the future during a resale because of decreased vehicle value.

In an at-fault incident, the at-fault party or parties must usually pay traffic citations and other fines, court fees, defense attorney fees and a higher insurance policy premium. They might lose their insurance or driver’s license and face a state surcharge. If they’re a non-resident driver, they might receive a driving restriction or a vehicle safety class or substance abuse rehab requirement from the state where the accident took place.

Yet, victims and other survivors typically take on the brunt of known and hidden costs. The non-fault vehicle or property owner sometimes pays a high deductible before their insurer pays anything. They might need to borrow money from a lender or even friends or family to cover repairs and other costs, especially if they lose time from work and any associated income. 

A person with injuries must pay auto and health insurance deductibles and service co-pays. If the accident doesn’t occur in their home state, they must pay out-of-network provider fees. The cost of healthcare might bypass the maximum permitted insurance coverage amounts. Anyone suffering from permanent disability or who needs long-term mental health or rehabilitation, especially if they have reduced capacity to perform academically or socially or contribute to home and work life, also faces high extra medical costs.

Top Ways to Pay Hidden Costs

When a car accident victim or other type of survivor needs additional money to cover hidden costs, they have the right to pursue a claim in a court of law. That said, court proceedings and a decision about this type of case can take a long time, even with legal support from an experienced attorney. The good news is most car accident attorneys work on a contingency basis, meaning there won’t be any cost to you unless they win your case. 

In many places nationwide, anyone adversely affected by traffic accidents can negotiate lower costs, set up payment plans with creditors and service providers, and apply for government and non-profit services. State community action and outreach organizations, the United Way’s 211.org referral service, and FindHelp.org are good starting points for survivors to learn more about their local emergency hardship options, including financial, food, housing, utility, co-pay and employment assistance. State career resource centers, offices of vocational rehabilitation, and centers for independent living can also help people find supportive current career and new job options and other critical services that can lower costs and make their lives easier while they recuperate and cope with new challenges.

Please follow and like us: