Dealing with insurance is a necessity following a major motor vehicle collision. You need to file a claim if you hope to get benefits to pay off your hospital bills or repair your vehicle.
A settlement offer from the insurance company means you don’t have to wait for payments and can handle your financial responsibilities as soon as you cash the check. However, the downside of a settlement offer is that you typically can’t ask for more compensation later.
Before you make a decision about a recently offered settlement following a car crash, you need to consider the four factors below carefully.
1. Your vehicle repair costs
You need a vehicle that is safe to drive, and that might cost you thousands of dollars after a crash. In fact, the insurance company may determine that your vehicle is no longer safe because of the damage it sustained, which means you will have to replace it with a new vehicle. You need to know what it will cost to fix your vehicle or to replace it with a comparable vehicle to secure a fair amount of compensation.
2. The diminished resale value of your vehicle
Especially when you own the vehicle outright and it is not a total loss, you may need to talk to a professional to estimate the reduced resale value or diminished value of your vehicle. A car with a significant crash in its history, even if the owner made repairs, will typically command a lower price on the resale market or when used as a trade-in at a dealership. The more prestigious and valuable your vehicle is, the more likely its diminished value is to affect your finances later.
3. Your current and future medical costs
You may already have statements from the hospital about how much your care has cost thus far, and you may also have recommendations from your doctor for additional treatment, like physical therapy or surgery, that you know will cost even more in the future. You need to know not only what you have already accrued in medical expenses but also what future expenses you will need to cover to ensure that the settlement is sufficient for your needs.
4. The impact on your income
Did you need to take three weeks off of work for rehabilitative care following the crash? Have your injuries forced you to change your career development plans and likely altered your earning potential by diminishing the tasks you can perform? Lost income and reduced earning potential are often some of the biggest expenses people incur in motor vehicle collisions.
Knowing what expenses your insurance settlement should cover will help you better evaluate if it is appropriate for you given the circumstances. Carefully reviewing a settlement after a motor vehicle collision will be critical for your financial protection.