Why an Emergency Fund Is Essential for Budgeting for Accidents
An emergency fund is 3-6 months of your household expenses bundled into a single account. You can use it for sudden needs after losing a job or having a medical emergency. With that, you can also depend on it to get out of a dead-end after experiencing an accident.
If you have not heard about using emergency funds to find support with accidents before, you may want to learn all the benefits that it brings to the table. The following quick guide helps you determine why an emergency fund is essential for budgeting for accidents.
It Helps You Cover Immediate Medical Needs
After a car accident, you often need medical assistance. While insurance can provide you with some coverage, your provider may need you to pay a significant sum to cover your medical bills – which is also known as copay. By having an emergency fund, you can get the financial support that you need during this time. In addition to medical bills, emergency funds can also help you avoid cash loans for property repair after a collision.
It Lets You Take Care of Your Car
In case you have car insurance, you may also need to go through the route of copay to cover your car repair costs. When you have an emergency fund, you don’t have to think twice about the copay on your car insurance. In turn, you can quickly file your claim with your insurance provider and have them figure out the estimate for your coverage through solutions like body shop management software.
It Allows You to Hire Legal Help
Immediately after an accident, you may want to hire an attorney who could negotiate on your behalf with insurance providers and the other party involved in the accident. This not only allows you to focus on your recovery, but also increases your chances of securing a higher compensation from your claims or lawsuits. With an emergency fund, you can find competent legal help through an in-person or online attorney service.
It Supports You in Making Up For Lost Income
No matter if your accident occurs due to a lack of important car safety features or the other driver’s negligence, if it renders you temporarily unable to work, you can often sue the other party involved in the accident. But as you recover those funds, your emergency fund can help you cover the gap between your income and expenses. This sets you free from worrying about your bills, rent, mortgage payments, and similar obligations.
It Enables You to Get Ongoing Treatment
While many people recover from an accident within a few days, others could take months. If you fall under the latter group, you may need ongoing treatment and have to use solutions like a medication reminder app. Even when you have insurance or plan to sue the other party, you may need some cash at hand to pay for your long-term treatment costs. In these instances, an emergency fund can be the solution you need.
It Buys You Time to Think About Next Steps
When you are short on funds, the stress can get to the point where it renders you unable to think straight. This can cause you to delay making important decisions like considering bringing a lawsuit against the other party to claim your rights after a bike accident or car accident. With the help of an emergency fund, you can take care of your obligations and focus on deciding your next steps after your accident.
It Gives You the Peace of Mind to Recover Mentally
Speaking of focusing on things that matter, an emergency fund also helps you obtain peace of mind by taking off the massive burden of expenses from your shoulders. This allows you to properly recover your mind from the traumatic event that you have experienced and ensures that you can get back to day-to-day life without suffering further from mental health conditions like anxiety or PTSD. Your funds can also allow you to access solutions like an online therapy platform.
With these aspects in mind, you can understand why an emergency fund is essential to cope with difficulties associated with accidents. From there, you can carefully plan your next steps to build your own emergency fund.