Avoiding devastation: Securing emergency financial help after a collision

1
kate_sept2004/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . This content is powered by HomeInsurance.com (NPN: 8781838). For more information, please see our

About 38,000 people die each year from U.S. motor vehicle crashes, costing about $55 billion in medical expenses and work loss alone, according to the Centers for Disease Control and Prevention (CDC).

All it takes is a split second for an accident to happen, but the aftermath can stretch on for a long time. A car accident can trigger many expenses that far exceed the damage to your car. If you are not prepared, you could easily find yourself facing financial devastation after a car accident. Fortunately, there are some ways that you can find emergency financial support and help protect yourself from financial devastation.

More than just a crash

Motor vehicle crashes cost $463 billion each year, according to the National Safety Council (NSC). The NSC offers these figures for total costs associated with a car accident, depending on the type of associated injury.

Average costs of vehicle crashes (NSC)

Type of injury Cost per injured person
No injury $2,300
Possible injury $25,300
Non-incapacitating injury $53,200
Incapacitating injury $208,500
Death $4,100,000

Damage to your vehicle can range from a fender bender to complete destruction. These are some costs for typical repairs to your car after an accident:

If personal belongings in your car are destroyed, you may need to file a claim to replace them. Additionally, your accident could cause damages to other types of property, such as a fence, garage, shed or landscaping. Adequate car insurance could help offset some of these costs, so it is a good idea to ensure you have a solid policy before hitting the road.

Financial devastation

It does not take much to push some households over the edge financially after an accident. Most Americans do not have a ton of savings, so just one accident could mean bankruptcy for some families.

Medical expenses can quickly accrue over a very short time, and they are significantly worse when you require long-term care. For example, the average emergency room visit costs $3,300, while the average inpatient hospital stay costs approximately $57,000. When dealing with such large amounts, some drivers may hire a lawyer to help guide the process. However, if your lawyer demands payment upfront, it can present significant financial difficulties very quickly.

Car insurance is also likely to increase after an accident, with the average annual policy increasing $637 after one crash. When you have an accident on your record, car insurance companies are also likely to charge higher premiums to account for higher risk.

With so many costs, it is not difficult to see how the average driver might face financial devastation after a car crash.

Low-income families: A special case

Low-income families are especially reliant upon regular employment and often have hourly jobs, which can easily be disrupted after an accident.

If you sustain serious injuries in your accident, you could be forced to take time off work. That could be very expensive if you do not have enough paid time off accumulated to last through recovery. Some injuries take weeks or even months to recover from, which is a significant amount of time if there is no paycheck coming in to help with the mounting expenses.

Some employers will work with injured employees to provide additional accommodations, while others may simply opt to terminate employment and look for a replacement. Unfortunately, without a regular income, it can be near impossible to meet these mounting expenses, quickly leading to bankruptcy and financial ruin. Thankfully, there are some ways to find financial support.

Getting relief

Almost 75% of all expenses from motor vehicle crashes are paid by parties directly involved in the accident. If you need financial aid to help with your portion of accident costs, these are some parties and organizations that might be able to help.

Housing aid

Several forms of federal support can help you when you need general emergency financial aid.

  1. Community Action Partnership: This non-profit helps nearly 150,000 families secure safe and affordable housing per year, with training and referrals for ongoing financial relief.
  2. Volunteers of America: VOA offers housing for more than 25,000 seniors, veterans, and other families who are all in need of emergency housing.
  3. Emergency Rental Assistance program: This federal program offers additional funding to help low-income and impoverished families pay rent and utilities. These federal funds are given directly to states and local governments for individual disbursement.
  4. Housing Choice Voucher Program: Also known as Section 8 housing, this program helps low-income families and individuals secure safe and stable housing at a reduced rate.
  5. U.S. Department of Housing and Urban Development (HUD): Like Section 8, HUD offers low-income housing, other forms of subsidized housing and financial grants so low-income households are not faced with homelessness.
  6. The American Rescue Plan: With the Homeowner Assistance Fund, there is nearly $10 billion in housing support that is paid out to states, territories, and tribes for homeowners facing foreclosure or extreme debt.

Medical needs

Medical expenses can quickly send anyone into debt, but these are some medical-related resources that might be able to help.

  1. Opt for Hill-Burton Facilities: In exchange for federal funding, there are hospitals, nursing homes, and other facilities that are obligated to provide free or reduced services for low-income patients.
  2. Medical Assistance Tool: Also known as PhRMA, this tool helps low-income families receive access to the medical prescriptions they otherwise would be unable to afford.
  3. Medicare Savings Programs: This program provides specific support for medical expenses, helping you pay for your premiums, copays, deductibles, patient care and other medical expenses. The program is available to people who are eligible for Medicare (65+ and/or disabled for two-plus years).
  4. The HealthWell Foundation: If you do not have adequate insurance, you may qualify for assistance with premiums and out-of-pocket hospital costs, as well as overall medical debt.
  5. The National Association of & Charitable Clinics (NAFC): The NAFC provides healthcare support through its 1,400 clinics across the U.S. for low-income individuals and families.

Legal aid

There are also forms of legal support to help you tackle your debt and find other support resources.

  1. American Bar Association Free Legal Help: The ABA can help you find free legal support or pro bono representation.
  2. LSC Legal Aid Finder: Established by Congress, the Legal Services Corporation (LSC) provides funding and access to more than 130 non-profit organizations in all 50 states, as well as the District of Columbia and U.S. Territories.
  3. LawHelp.org: This online directory can help you find free legal aid in your area based on the kind of legal support that you need.
  4. Upsolve: If you are considering bankruptcy, Upsolve can help you find the legal support you need to ensure that this is the right decision for you. If you decide to file for bankruptcy, there are several resources to help you get the process started.

General financial aid

These organizations and programs also provide emergency support for people who might be facing financial devastation.

  1. Financial Coaching Project: The Consumer Financial Protection Bureau (CFPB) sources financial coaches to help veterans and low-income consumers with one-on-one financial coaching.
  2. Modestneeds.org: This tax-exempt charity provides minor emergency grants for low-income workers. Since 2002, it has helped more than 16,175 households through their online grant application.
  3. 2-1-1: Dial 2-1-1 to reach United Way’s 24/7 financial support line that can provide utility assistance, among other services.
  4. TANF: Temporary Assistance for Needy Families (TANF) provides grants to U.S.states, territories, and tribes for low-income assistance. Families with children can receive TANF grants directly from their state or regional provider for emergency monthly cash payments and support services.
  5. Feeding America: This non-profit delivers emergency food assistance through an expansive national network that includes 60,000 food pantries and meal programs in addition to 200 food banks. Long-term assistance is also available to help you get back on your feet.
  6. Lifeline: Provided by the Federal Communications Commission (FCC), this program assists with everything from your utility bills to landline and cell phone service.
  7. Low Income Home Energy Assistance Program (LIHEAP): This is another federal program designed to provide support with heating and cooling expenses, as well as energy emergency services and low-cost home improvements, such as weatherization.
  8. Protection and Advocacy of Beneficiaries of Social Security (PABSS): Through this program, the Social Security Administration provides support to social security recipients who can benefit from vocational rehabilitation and employment services.
  9. Natural Disaster Emergency Relief: For those areas affected by natural disasters, you could receive additional federal assistance that can help with food, bills, unemployment, and more.

Be cautious when borrowing

Pressing urgency can sometimes lead us into decisions we otherwise would not make if we had the time and wherewithal to rationalize the situation. When exploring your options for emergency financial support, beware of these options, which may be more trouble than they are worth:

  • Retirement funds: Even if your retirement fund carries some cash value, you could face hefty fees and penalties if you withdraw prematurely.
  • Payday lenders: These are loans that borrow against your upcoming paycheck with rates ranging from 400% to more than 1,000 percent.
  • Credit card withdrawals: Your credit card may allow you to make cash withdrawals, but this also comes with high fees that can quickly add to your debt rather than help it.

It is typically a better idea to exhaust your federal, non-profit and private donor support options before you commit to overpriced fees and loans. You may want to stay vigilant against scam programs, though. The Federal Trade Commission (FCC) warns that “free grants” could be fraudulent and risk not only your identity but your remaining finances, as well.

Crowdfunding resources, such as GoFundMe, might help provide immediate financial support without the risk and the long wait associated with government loans and grants.

The bottom line

A car crash can cause severe destruction. There are usually many short- and long-term costs associated with an accident that require immediate attention—and payment. But there is often help available if you know where to look. The federal government and private donors make many public, private, and non-profit organizations possible every day, building and growing financial grant and support programs that can help those who have suffered a motor vehicle accident. So before you take out a loan with sky-high interest rates or make an expensive withdrawal, you might want to consider what other options are available for help.

Written by
Lena Borrelli
Insurance Contributor
Lena Muhtadi Borrelli has several years of experience in writing for insurance domains such as allconnect, Healthline and Reviews.com. She previously worked for Morgan Stanley.
Edited by
Insurance Editor