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How to Save Money After a Car Accident

Fender Bender

Your first thought after a car accident is probably to make sure everyone is alright. A close second might be panicked questions about what your car insurance is going to cover and if your rates are going to spike.

Whether you rear end someone while reaching for your phone that fell between the seats, scrape a bumper in a parking lot, lose a side mirror to a hit and run driver, or get t-boned at a red light, insurance rates can change regardless of who is at fault. We hope you never find yourself in this situation, but if you do, here’s what you can do to make sure it doesn’t cost you more than it has to.

Ask for forgiveness

There are a lot of plans out there today that offer “accident forgiveness.” These plans generally operate on the premise that if it’s your first accident, your insurance rates won’t go up. Average claims in 2013 came in at $3,144 for collisions and $1,621 for comprehensive. Considering that an average plan increases 41% after filing a claim of $2,000 or more, having accident forgiveness could potentially save you a ton. Make sure you plan ahead by signing up for accident forgiveness and you’ll spare your wallet after your first (and hopefully last) accident.

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Fill in the “Gap”s

Gap insurance is meant for owners of newer cars. If your car is totaled, gap insurance will cover the difference between the amount your car is valued and the amount you owe on the loan. Since new vehicles depreciate 30% in the first year and 50% by the third, this could be the difference between thousands of dollars. For example, if you buy a brand new car for $23,000 and total it in the first year, your insurance will most likely only pay for about $16,000–leaving you with around $7,000 left to pay on your loan. In most cases, gap insurance will cover your deductible too. By protecting yourself with gap insurance, you’ll be spared from having to make payments on a car you no longer have in case of a major accident.

Plan for the worst. Expect the best.

After an accident, you might need to be towed. Companies that offer roadside assistance will help you save on these types of costs for a small annual fee. For example, an $85 AAA plan will provide you with towing up to 100 miles and roadside assistance 24/7–even if you’re not driving the car! Typically, flat rate towing costs between $50-$100 and an additional $3-$5 per mile. If you need to be towed, 20 miles, this could be $100-$200. This means that your membership would pay for itself and save you money after just one use. Plus, roadside assistance plans will also help you out and save you money if you lock yourself out of your car or need a jump.

Have your back-up ride ready

Ever think about how you’ll get around if your car is in the shop after an accident? If going without a car isn’t an option, then renting is what you’ll have to do for a couple days to a couple weeks–and even beyond. If your insurance doesn’t cover rental cars, this could cost you hundreds. Most plans don’t automatically come with rental car coverage, but this is something you can add on for a small monthly amount. Whatever you decide to do, just make sure you know exactly what your plan covers so you’re not surprised when you need to use it.

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Report accidents to your insurance agency ASAP

Neglecting to report an accident can come back to bite you. Even though it’s daunting to make that call, you can feel repercussions if your insurance finds out another way (like by being sued by another driver or reading a police report). Failing to report an accident could end up costing you more if your insurance agency has to go to court and doesn’t have proper time to build a good case. The less time they have to investigate, the more likely they are to lose. And if they pay, you most likely will too with a higher premium.

Call the cops and swap information

Even if it’s a tiny fender bender that both parties can drive away from, it’s never a good idea to opt out of legal documentation. In other words: always call the cops so they can file a police report! The accident may seem to be resolved at the scene, but you wouldn’t be the first to fall victim to court battles that ensue if the other driver has a change of heart and wants to play the blame game. By calling a police officer, you have an iron-clad witness to the accident who will record details that will protect you.

Practice safe driving

Getting in an accident is just that: an accident. We know it’s not always your fault or controllable, but practicing safe driving habits can help cut down on the chances of getting into a fender bender in the first place. Mind your distance, keep your eyes on the road, and cross your fingers that you’ll never have to use your insurance. But know that if you do, you’ll be okay.


One Response to “How to Save Money After a Car Accident”

  • Car accidents are inevitable, we just cant run away from them thats why one has to be prepared at all times…Most important is getting insured, having a legit reliable Tow Truck Company to assist you..because you dont want to sit for hours on the side of the road it has happened to me luckily it was during the day…Tow Truck Companies can be dodgy especially here in South Africa since most are illegal and violent. so always have a number of a recommended Tow Truck service that can assist you.

    Mbombela Towing -

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