If losing your job  is one of the most traumatic financial disasters you can face, a car accident is a close second. When you take financial cost of an accident, regardless of who is at fault, and combine it with the physical and emotional cost, there’s almost no debate for that second place spot.
This post is part of our Financial Contingency Plan series , which helps prepare you for some of the most jarring financial disasters you could face.
Unlike a job loss, car accidents have little to no warning whatsoever. My friends was recently stopped at a light when a car hit him from behind, causing over $5,000 in damage. It wasn’t, however, the other driver’s fault. He was hit from behind by a car who didn’t realize there was a red light (and at least three cars stopped ahead of him!).
When it’s clear you’re not at fault and there are plenty of witnesses (as was the case with my friend), you have nothing to worry about. It’s all the times where it’s a little ambiguous and the other driver hasn’t claimed immediately responsibility (in writing) that preparation can save you a lot of trouble.
Before an Accident
Review your auto insurance coverages and deductibles. It’s important to know what parts of your vehicle are covered and for how much. While it won’t affect what you will do during an accident, it’s important to review your coverages to you don’t discover bad news.
Prepare your post-accident checklist. Accidents are scary, which is why having a contingency plan is so important. What’s even more important than developing a plan is to write it down on paper, because it’s easier to read something than recall it from memory.
If you don’t have a camera on your phone, leave one in your car. You will always want photographic evidence of the scene of the accident. If you don’t involve the police, or if the police don’t issue a citation or report, it’s often your word against the other driver(s). Having visual evidence will strengthen your case, even though it’s a static moment in time, because it will still tell a story.
Clean out your car regularly, leave a spare empty duffel bag. Not only will cleaning out your car save you some gas, because you won’t lug around all that unnecessary junk, but it’ll save you some headache should you get into an accident. If it’s an especially bad collision, things get slammed around and become missiles inside your own car. Afterwards, if your car is inoperable, you will need the empty duffel bag to put all your possessions before the car gets towed away.
After an Accident
This is what I do after a car accident , I’m not a legal or car accident expert (thankfully) but I think this list covers a lot of the important points. It’s especially important to follow the tips on information collection, under the “Get Driver’s License & Insurance Info” section.
Once you deal with the police and collect all the information you need, it’s time to tend to your vehicle. If it’s operable, you’re lucky, drive away. If it’s not, now’s the time to use that spare bag you put in your trunk to take anything you can fit. When your car is towed, it’ll be taken to the tow operator’s lot where it won’t have much security. They won’t steal anything (usually, since it’s their lot) but that doesn’t stop random people from breaking into your car while it’s waiting for an insurance claim resolution.
Hopefully you will never be in a car accident. If you are, I hope these tips will help you out. If you have any tips or suggestions you’d like to share, please let us know in the comments!
(Photo: orangechallenger )