You’re driving down the road, minding your own business, when suddenly another vehicle crashes into you out of nowhere! The next moments are a terrifying blur of screeching tires, crunching metal, and shattering glass. As your car hurtles off the road or into another lane, your adrenaline spikes while bracing for an impact that feels like it may never end.
When the motion finally stops and the dust settles, you slowly realize…you’ve just been in a serious car accident. Dazed, you glance around – airbags deployed, belongings strewn about the car, the vehicle itself seemingly totaled. It’s evident that this collision has already drastically altered the course of your day. But what you may not yet grasp is the potential for it to forever change the trajectory of your financial life.
Understanding Car Accident Liability
According to statistics from the National Highway Traffic Safety Administration (NHTSA), over 6 million motor vehicle accidents occur annually in the United States alone. Of those collisions, an estimated 3 million result in injuries while over 36,000 prove fatal. Beyond the physical harm endured, the financial toll stemming from these road tragedies can be immense.
As the dust clears in the moments following your crash, the question of who’s at fault may quickly arise. Determining legal liability and negligence after an auto accident hinges on a few key factors:
- Which party violated traffic laws or ordinances? Running a red light, speeding, drunk driving, etc.
- Whether a reasonable standard of care was exercised. For example, driving cautiously for the conditions at hand.
- If the actions (or lack thereof) directly caused the collision. Slamming on brakes, swerving lanes without signaling, etc.
When liability gets established, the at-fault party typically shoulders responsibility for the economic and non-economic damages stemming from the crash. What kind of harm defines these damage categories?
- Economic damages cover quantifiable monetary losses related to medical bills, property damage, lost income, etc.
- Non-economic damages address more intangible yet still detrimental impacts such as pain and suffering.
If negligence lands on your shoulders, the out-of-pocket expenses add up fast. And when claims exceed your insurance coverage limits – or hit the multi-millions – your personal assets face jeopardy.
The Importance of Adequate Insurance
Carrying a sufficient auto insurance policy serves as a crucial first line of financial defense in case of an accident. Most states legally require drivers to carry liability coverage in certain minimum amounts. Yet those bare-bone plans likely pale in comparison to the damages wrought by a serious collision.
Instead, ensure your auto policy includes:
Auto Liability Coverage
- Bodily Injury – covers injuries sustained by other parties involved in the accident
- Property Damage – addresses damage repairs or replacements for the vehicles and other property
Uninsured/Underinsured Motorist Protection
- Safeguards you when an at-fault driver carries no coverage or too little coverage
Umbrella Insurance Policy
- Provides additional liability coverage beyond standard auto and homeowner’s insurance maximums
By the 2019 analysis from insurance comparison site The Zebra, the average car accident injury claim amounted to over $15,000. Now tally a totaled vehicle, ongoing medical expenses exceeding $100k, potential lost wages, soaring car rental fees, property damages, etc….and that total rapidly escalates into hundreds of thousands of dollars or more!
Hopefully you’re starting to comprehend just how financially devastating a serious car crash can become over time. So how do you make certain your assets stay protected?
Legal Protections and Exemptions
Luckily, federal and state laws offer provisions to shield certain assets from seizure – which becomes especially critical for at-fault parties following an accident. Two prime examples include:
All states provide legal protections for an individual’s primary residence. In Florida, for instance, the home receives safeguarding up to an equity value of $1,000. Other states offer unlimited home equity exemptions or set maximum thresholds well over $100k.
Tenants by the Entirety
About half of U.S. states recognize this unique joint ownership structure exclusively for married couples that mutually own a property. Unlike other co-ownership formats, each spouse legally holds full ownership and rights. This makes jointly held assets exempt from seizure over an individual debt obligation – like a car accident judgment.
Additional exempt asset examples that provide shelter include retirement accounts, life insurance plans, annuity policies, primary vehicles up to a certain value, and tools/household goods deemed essential. But regulations vary by state, so research what unique legal protections govern where you live.
Strategies to Safeguard Assets
Alongside leveraging legal exemptions, proactively shield your assets by:
Carefully Titling Ownership
- For married couples, hold property as tenants by the entirety whenever possible
- Title vehicles solely under the individual driver’s name
- Maintain separate bank accounts vs joint ownership when feasible
By avoiding co-mingling assets or limiting shared stakes, exposure shrinks if an owner winds up liable after an accident.
Setting Up Trusts
Living trusts designate a trustee who legally manages assets on behalf of beneficiaries. Property held in trusts enjoy protection from creditors. While no foolproof guard against high dollar injury lawsuits, trusts do reinforce financial safeguards.
Transferring High-Risk Assets
Consider shifting ownership of all vehicles, boats, rental properties, etc. posing accident liability threats into an LLC (Limited Liability Corporation) or other protective entity. Consult experienced legal counsel to appropriately execute transfers.
Hiring an Attorney for Representation
In the traumatic aftermath of a collision, navigating legal claims and negotiations often stands as the last thing on your mind. An adept car accident lawyer handles critical tasks like:
- Interviewing to build a robust case
- Liaising with insurance adjusters and risk managers
- Valuing and validating every damage element
- Negotiating fair compensation settlements
Retaining sound legal counsel right out the gate often makes or breaks accident victims achieving proper recourse and asset conservation. Savvy personal injury attorneys intimately understand state statutes impacting financial liability while bringing shrewd negotiation tactics to effectively dispute exaggerated demands.
Key Steps to Take After an Accident
While awaiting the arrival of emergency responders and law enforcement, key moves to take at the scene include:
- Documenting damage and injuries
- Photographing sight lines, car placements, debris scatter patterns and more
- Exchanging insurance and contact information
- Taking careful notes of the events preceding and during the crash
In conversations with the other motorist(s), stick to concise statement of facts and avoid admitting guilt or liability.
Later when providing police statements, answer questions transparently while steering clear of self-incrimination. Declining to speculate or share hypotheses proves prudent until circulating details with trusted counsel.
In addition to collaborating closely with your insurance provider, be sure to follow physician guidance, attend all follow up appointments, save receipts and records related to accident expenses, steer clear of early settlement offers, and above all – commence connecting with attorneys to get specialized legal advice.
The steps undertaken while your reeling mind clears from the startling disruption of a serious motor vehicle accident set the stage for property conservation and financial remedy road ahead.
As famed physicist Isaac Newton archaically established, “For every action, there is an equal and opposite reaction.” The same holds true for car accident trauma and liability. Just one split second driving error jeopardizes asset preservation and precipitates expensive consequences for years to come.
Implementing protective safeguards demands intentional effort. But positioning your finances to persevere, coupled with securing seasoned legal representation, paves the way for future stability.
Hopefully an auto collision remains far from your windshield. But chances are you know at least someone who has endured accident agony. So do yourself and loved ones a favor by spreading awareness on avoiding and addressing the economic impacts of car crashes.
After all, the more folks focused on safety measures and protective steps…the less accidents likely to transpire in the first place!