Financials & Accidents
How Do I Manage In the Meantime?
If you are so unfortunate as to be involved in an automobile accident and suffer significant injuries, you may not be able to work for an extended period of time. To make matters worse, what if you are the major or sole breadwinner in the family? How does your family survive if you have to endure weeks, months, or even years of lost time and wages? There are a number of tools at your disposal both before and after an accident to help ease the burden of such life-changing and catastrophic events.
Before An Accident
If you are lucky enough to be reading this and you or a family member has not been in an injury related accident, you are one of the fortunate few. However, it is never too early to plan and prepare in case such a life-changing event happens to you and your family.
First and foremost, always make sure that you are properly insured. Depending on your personal situation such as whether or not you are married, have children, and the amount of property, income and expenses you have, you need to be insured accordingly. Every person’s situation is different, but the following insurance should be considered based upon you specific circumstances:
- Underinsured & Uninsured Motorist
For further discussion, please refer to Iowa Insurance Company claims. For more information about various insurance companies in the state of Iowa, we have found a few websites that might be helpful: Iowa Insurance Division, IID Searchable Database, and Iowa Insurance. (Note: this is not an endorsement of any one of these companies).
We’ve all heard it before but the more prepared you are for a financial downturn or disaster, the better able your family will be able to survive through such hard times. Accordingly, it is always advisable to keep accessible and liquid funds equal to a minimum of 6 months wages for just such disasters.
After An Accident
As is the case with most of us, we are often not completely financially prepared for emergency situations. So what happens to us financially if we have family to provide for but cannot work?
If you have a job at the time of the accident, check to see what benefits or deference your employer will provide. Some employers provide additional time for injuries even if not work- related. You also may well be able to use sick days and vacation days as a way to continue to get paid following an accident. As always, consult with your attorney first, but then speak with your employer to see what types of benefits might be available in the short term.
There are a number of ways that you can delay or avoid personal responsibility for medical bills should you find yourself incapacitated for a certain time. As always, you must talk to your attorney before exploring these options as payment of medical expenses can have significant effects on your compensation from an accident claim later on. However, often times insurance will pay medical bills directly, thereby relieving you (at least temporarily) of the responsibility of paying medical expenses. Temporary insurance payments may come from your insurance company, the other driver’s, your health care company, the other driver’s employer, or other sources, depending on the situation. Even if a company does not take responsibility for an accident initially, there may be a “medical payment” that is available for an injured party regardless of fault under one or more policies. However, the availability of temporary insurance payments is something any good claimant’s attorney will explore.
Medicare and Medicaid may also cover some portion of or all of the bills associated with injuries from an accident depending on your eligibility.
For more information on Medicaid and Medicare eligibility, you may want to review the eligility guidelines, Iowa Department of Human Services Health Care, Medicaid Programs, Social Security Disability Programs, Disability Programs, and Supplemental Security Income.
Also, even if no third party agrees to temporarily pay medical bills, a proactive attorney can sometimes persuade medical providers to hold off on collection of such bills pending resolution of the claim. Once again this cannot be guaranteed but simply illustrates another advantage of having an effective claimant’s attorney on your side, protecting your rights.
Many types of financing exist if your family finds itself in a financial bind where additional funds are immediately necessary. Obviously, each individual’s ability to access such funds varies based upon their given financial situation.
Lines of Credit
Banks offer lines of credit which are basically unsecured funds that can be accessed when necessary. These can be set up before emergency funds are needed even if they are not immediately accessed. This is a good idea as it is often times easier to qualify when times are better plus if it is already set up, with very little delay in accessing the funds. These loans are set up to be short term. While getting the funds can be much simpler and quicker than other types of loans, the interest rates can be higher and sometimes the required payments can be larger as well so these are best used for short term loans.
Another common source of funds is in a person’s equity in their residence. Should you own a home, refinancing or getting a second home equity loan can be a great way to access funds. Such loans are basically notes secured by your house as collateral just as was your first mortgage. Therefore, while these funds can take a little longer to procure relative to others, they can be a better long term fix as the interest rates, depending on the market, are often times relatively lower, as can be the corresponding required payments.
Cash advances are a last resort if the situation is particularly dire. While cash advances offer almost immediate access to cash, you still must have the credit to get the money. But worse, such loans almost always have extraordinarily high interest rates. These should be used only in an emergency and ideally only for very short time periods.
It has been said that the only people that can get loans are the ones with money. This unfortunately seems to be the case sometimes. Accordingly, if none of the above options are available or appropriate for the situation, there also exist lawsuit cash advance services that will actually advance part of the potential recovery in certain cases. These can be a good last resort if no other personal funding is available at a given time. The good part about these advances is that they are not actually loans. They are merely advances on any potential recovery you might receive. Therefore, if the case goes to trial and the jury does not give an award to the plaintiff, you do not owe anything to the company. However, the downside of the companies taking such risks is that the interest rates on the advances are quite significant and, like other high interest loans referenced above, can eat up a significant portion or all of a recovery in some circumstances.
All of the foregoing means to help a families’ financial affairs following a significant injury focus on relatively short term help. Sometimes, however, injuries will prevent a person from working for an extended period of time, even for the rest of their life. These situations are compensable in the underlying lawsuit. One of the damages that are available for an injured individual is lost wages. Accordingly, should a lawsuit not settle for an extended period of time, a person needs to be compensated for all of the wages, salary, or other foregone compensation that they otherwise would have made but for the injury occurring.
Additionally, if an injured party is not going to be able to work in the future, an additional award for lost earning capacity is available to compensate the person for future losses. In this way, even though the person has lost the ability to earn money, they are compensated for such future earnings in the underlying settlement or award.
While serious injuries can be devastating to a person or a family, there are tools that can be used to ease the burden. Once again, an experienced claimant’s attorney should be able to counsel their client on what help is available and how to go about obtaining such assistance.