No one begins a road journey expecting to have an accident, but sadly they’re a part of life all over the world. In America during 2019 there were 38,800 deaths through motor vehicle collisions. Accident survivors can be left traumatised and injured. They may be unable to work, facing mounting bills and needing medical attention. Legal action may also be taken that results in a battle between the injured party and a large insurance company.
It can be overwhelming knowing what to do in such situations. People are rarely in the right frame of mind to act wisely alone. Fortunately help can be at hand. There is an abundance of advice on the internet, and there are opportunities to receive financial help where it is needed.
One such option is taking out a car accident loan. Let’s discuss these now to gain a fuller understanding.
They Are Risk Free: Car accident loans are not technically loans, which means they’re not placed under the usual lending laws. They are cash advances that are provided before a financial settlement has been made. The financial experts at Nova Legal Funding say a pre-settlement figure of between $500 and $2.5m may be awarded to the plaintiff (the person who was injured in the accident). If the claimant loses their battle for compensation against the other party, no fee becomes payable. That means the person does not have to repay the car accident loan.
Another term for these loans is ‘non-recourse funding’. What this means is that the plaintiff is not the person taking the financial gamble; it’s the lender. It is reassuring for injured people to know that such advances are therefore risk free for them. They only need to pay for the loan if they win the case. If this becomes protracted, interest will be required on the loan. This will fortunately be a low figure of around one to three percent.
They May Be The Only Option: There will be a time delay before any settlement is paid following an accident. This could be anything from several months to several years. The problem is, the person who is injured may run into financial difficulties while they are waiting for possible compensation. They may have bills to pay, be unable to work (temporarily or permanently) or needing to pay for urgent medical costs and treatment. Traditional bank loans will not be a solution in such circumstances.
Car accident loans are not free. If a person wins their case they will need to make a payment based on the amount loaned to them. If someone has sufficient funds to be able to ride the storm without help, they would be wise to use these rather than taking out a loan. If this is not the case, however, the car accident loan may be the only route a person can take, although in some cases you can also get cash from your damaged vehicle by selling it online.
The Attorney’s Opinion Will Be Key: In order to receive a car accident loan, an injured party will be required to employ an attorney. Many attorneys run on a ‘no win no fee’ policy. This means that they are unlikely to represent someone if they don’t think they have a good chance of winning the case. When loan companies are approached by a client, they will take the details of their attorney. They will then contact them to discuss the strength of the case. If the loan proceeds, both the plaintiff and the attorney will sign the document. Once again this will reduce the risk to the injured party.
They Provide Leverage During The Legal Process: Insurance companies are large businesses that seek to avoid paying out on claims. If they are required to pay out, they will want to pay the least they can. We mentioned earlier that claims can take a while to be resolved. Insurance companies can afford to take their time. It’s frequently the injured party who comes under pressure during this stage. A person may need money for an urgent operation so they can get back to work. Alternatively they may be behind on their rent and afraid of losing their home. Under these circumstances many people cave in to early settlement offers from insurance companies. As a result, they accept what could be much less money than they’d have got if the case had fully run its course.
The longer a case runs, the more money a claimant stands to gain. A car accident loan can bridge the financial gap for the plaintiff. They are then put in a position where they can pay their bills, and wait for the fairest settlement amount. If lower offers are refused and the case goes to court, the plaintiff will be hopefully able to afford the wait. It could pay dividends.
They Make It Easier To Wait For A Full Medical Diagnosis: The greater the injury, the greater the compensation payout. Someone may be tempted to accept an early settlement offer from an insurance company, before a full medical diagnosis has been made. The fact is that some secondary medical symptoms take time to materialise. Adrenaline can mask pain and bruising will take time to fully come out. An initial doctor’s report will not be the most powerful evidence in court. This is because they are generally qualified rather than medical specialists.
It will take time for a consultant’s appointments, tests (eg. CT scans) and reports to be made. This will be more weighty evidence for the case in court. It is during this time delay that the client may discover other medical issues resulting from the accident. If someone has a loan that enables them to be able to wait for the full medical reports, this could have financial benefits in regards to the compensation figure.
As you can see, there are many benefits to taking out car accident loans. They particularly apply if a person does not have the funds they need in order to wait for the eventual compensation. There are no upfront fees to pay and no monthly fees. Credit checks are not required and the paperwork can be straight forward. The money may even be received within 24 hours. People should research different loan companies before proceeding, looking for transparency regarding finance.