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Average Cost of a Car Accident: How to Pay for It All

Last updated 03/19/2024 by

Heather Skyler
Car accidents claim nearly 1.3 million lives every year, according to the Association for Safe International Road Travel. And 20 to 50 million people are injured or disabled each year, as well. It’s no wonder that the average cost of a car accident is also up.
Annual cost of car accidents.
The U.S., alone, accounts for over 37,000 of those fatalities and 2.35 million injuries. Unfortunately, though, the damage doesn’t end there. Your bank account could also take a hit.
Car accidents cost the U.S. $230.6 billion every year, which is an average of $820 per person. Not to mention the fact that you may have to take time away from work and possibly lose part of your regular income.
So what steps should you take if you’ve been injured in a car accident, and how can you afford the bills without going broke?
Let’s take a look.

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Alert your insurance

The first step is to alert your insurance. Depending on your insurance and coverage, all of your injuries — as well as possible long-term care — may not be covered. If that’s the case, what are your options?

Consult an attorney

After an accident, you may want to consult an attorney to see if you have any options for filing a claim.
A lawyer, particularly one who specializes in personal injury, will be able to assess how much the accident will cost and where you might be able to find compensation.
Evan Walker owns his own legal practice in California and represents individuals in personal injury claims. While his cases run the gamut, he says the majority of them involve auto accidents.

What will affect the cost?

Many factors will determine the cost of a car accident.
  • The severity of the crash
  • The damages sustained to the automobile
  • The physical injuries suffered by passengers and others
  • The number of passengers injured
  • The value of your automobile
  • The value of any other property affected by the crash
  • Where the accident took place
  • Other variable factors

One outcome

Walker provides an example of a case that had a positive result.
“I represented a family whose 9-year-old son was struck by a car. He spent a week in the hospital and racked up $100,000 in medical bills. The insurance company for the driver said the boy was 50% at fault, that he shouldn’t have run out in the street. The police also blamed the kid.
“The driver was an 18-year-old driving a 20-year-old car, so I was guessing the driver had lowest fair amounts of liability insurance in California, which is $15,000. I put it all together and said I wanted the policy limits. Much to my surprise, the policy limits turned out to be 16 times that.
We did this without filing suit and in less than a year. All of the medical bills were paid, and most of the money went into a trust for the boy, who, luckily, was OK. This was a family of limited needs, and by the time the boy is an adult, he’ll have received ample compensation.”

Time away from work

Medical bills aren’t the only cost associated with accidents. If you need to take time away from work due to injuries, there will be a loss of wages and productivity. This is another factor that can be addressed by a lawyer.

Short term vs. long-term costs

The immediate, short-term expenses will be top of mind if you get injured in a car crash. For example, you might need a visit to the emergency room or see a doctor.
Long-term costs should also be considered. You might end up needing therapy, rehabilitation, physiotherapy, and other treatments.

How much is a typical settlement?

Here’s one common way to determine the amount you may receive in a car accident settlement: Take the cost of your medical bills and multiply that times three. So, if you racked up $10,000 in medical bills, your settlement should come in at around $30,000.
Because your insurance company should pay your medical bills and repairs, “pain and suffering” is the part of the settlement determined by a court.
In most cases, this amount is set by a judge who will consider your injuries, treatment, duration of therapy, the crash’s severity, and loss of wages. If you’re not at fault, the settlement will most likely be larger.

Paying your attorney

Walker explains that all personal injury lawyers work on a contingency basis, meaning they do not get paid until you are paid your settlement. Walker takes a third of settlements, he says, which is the standard.

Help with bills

It may take quite a while to receive a settlement, but you’ll still need to pay some bills and live your life in the meantime.
A personal loan is one option to help you through this period. However, different personal loans come with different rates, fees and requirements, so check out what the best personal loans are to ensure that you choose the best option for you. If you are approved, many lenders will transfer the funds into your account in as little as one business day.
Related reading: If you get in an automobile accident, will your medical bills be fully covered? How can you be sure you have all the coverage you need? Read Does Health Insurance Cover Car Accident Bills? to get a better understanding of the issues involved and how to prepare.

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Heather Skyler

Heather Skyler writes about business, finance, family life and more. Her work has appeared in numerous publications, including the New York Times, Newsweek, Catapult, The Rumpus, BizFluent, Career Trend and more. She lives in Athens, Georgia with her husband, son, and daughter.

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