Why Did My Credit Score Reduce after a Car Accident?

Being in a car crash causes all sorts of havoc in your life, including high medical bills, missed time from work, and damage to your vehicle. But there’s another downside that most people don’t think about – problems with your credit score. Over the years, we have received numerous calls and emails from car accident victims that wanted to know:

• Why did my credit score go down after a car accident?
• I was not at fault for the accident, but my score went down; is that legal?
• My credit score shouldn’t have been affected since I had health and auto insurance; why was it cut after my accident?

We know how frustrating it can be when your credit takes a hit, especially while you’re recovering from an accident. Unraveling exactly what happened and whether a reduction in your credit score is justified can be challenging, but we want to assure you that it’s possible. We’ve helped many clients sort out the repercussions of an accident that was caused by someone else, and we would like to do the same for you. For a free consultation with a California car accident attorney, contact Normandie Law Firm.

Can a Car Accident Cause my Credits Score to Drop?

Let’s start here, as this is a question that’s shrouded in misconceptions. First, we want to stress that having a car accident does not, in itself, impact your credit score, regardless of who is at fault.

The problem is the debts you are left with after an accident and how they are resolved by various insurance companies, medical providers, and benefits administrators. Generally, the focus is on medical bills, became this is the greatest source of monetary loss for just about anyone that’s been in a car wreck. To illustrate how your recovery needs may impact your credit score, consider the following example:

Kelly is driving home from work when she is hit by an uninsured drunk driver. Her injuries require immediate treatment, and she is taken to a nearby surgery center. She provides the surgery center with her health insurance information and assumes that everything will be taken care of. Three months later, she receives a letter saying that her account is being turned over to collections because of failure to pay. It turns out that even though Kelly gave the clinic her health insurance info, the bills were sent to her auto insurance provider. In addition, her health insurer is refusing to cover the costs, as the bills were not submitted in a timely manner.

Essentially, this claimant is stuck in a nightmare because her benefits were not coordinated in a timely and efficient manner. At this point, it will take quite a bit of work to undo the damage, as the outstanding bill is on its way to collections.

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Why was there a Problem with my Medical Billing?

When you pay into an insurance policy (or multiple policies), you expect things to be taken care of when you have an accident. Unfortunately, the coordination of benefits can be a very confusing process, even for insurance companies and medical billing departments.

By “coordination of benefits,” we are referring to the process of figuring out who pays for what, and the amount that each party will contribute. This is crucial to preventing claimants and insurance companies from double dipping, i.e., hitting up multiple companies for the same payment.

But why is this so confusing when each company serves a different purpose? Well, it has to do with the fact that many different types of coverage may come into play when someone is harmed in an auto accident. There’s Personal Injury Protection (PIP), which most people are familiar with as it’s mandatory coverage in many states. But you may also have Medical Payments coverage, health insurance through your employer, Medicare, and other forms of insurance.

The process of determining who should pay can drag on for months, especially in comparative negligence states like California, where each party in a car accident is assigned a percentage of “fault.” Even if it’s clear that one party is completely at fault, all kinds of delays and mix-ups at the insurance company can lead to unpaid bills, which you may not find out about until it’s too late.

What can I Do to Protect my Credit Score if I had a Car Accident?

There’s no denying that your financial well-being is at risk after a car accident. Fortunately, there are steps you can take minimize the impact it will have on your credit:

Report the accident immediately.

Make sure to contact your insurance company right away to report the accident, no matter who is at fault. In theory, your car insurer is supposed to look out for you and protect your interests. In reality, they may try to use any delays by the accident victim as grounds to deny payment on an injury claim.

Provide all the relevant insurance information.

In the above example, it’s understandable why Kelly only provided her medical insurance info to the surgery center. However, it’s best to provide information for both your health and car insurance policies. In addition, make sure to contact both companies as soon as possible to report your accident and obtain a claim number, Then, give this information to every single medical provider that you go to. This can help to reduce the possibility of errors and bounced payments between the medical facility and whichever insurance company is billed.

Double check and save everything.

Never assume that the companies are doing what they’re supposed to in reference to your claim. Checking up on whether payments have been made, if your insurance company is willing to wait for payment and how long, etc., is the key to staying on top of your credit after an unexpected injury. In addition, start a folder where you can keep all correspondence (bills, letters, and emails) that are related to the accident. This will help you keep track of what needs to be paid and make it easier to follow up with the insurer and confirm that they’ve issued the payment.

Don’t be passive.

No one should be a Karen and make unreasonable demands on insurance agents, who are dealing with hundreds of claims at the same time. But there is a difference between being passive and making sure that the insurance company is doing their job. You are, after all, paying for coverage in the event of a car accident, and you have every right to stay on top of your claim. If it’s taking too long to process a claim or you’re getting the run around from the insurance adjuster, there are ways to escalate things. You can, for example, file a claim with the California Department of Insurance, which is responsible for investigating customer complaints about insurance providers in the state of California.

Hire an experienced car accident lawsuit attorney.

Frankly, this is the most valuable step anyone can take if they are injured by a careless or reckless driver. Along with aggressive legal representation, our job as your legal advocate is to keep your bills out of collections. Aside from protecting your credit score, we can help you repair any errors in your credit report that resulted from a car accident.

We also work with hospitals, physical therapy centers, and other medical providers to make sure that you are getting the best possible care. We may also be able to negotiate a medical lien with providers, meaning they will wait to receive payment after you receive your settlement from the negligent driver. These are just some of the ways we can protect your credit score while fighting for the maximum compensation you deserve.

The Zero Fee Guarantee

Along with your credit score, our goal is to protect your finances and ensure that you won’t have to choose between making ends meet and hiring an experienced attorney. With the Zero Fee Guarantee we offer each and every client, you won’t have to worry about legal fees for the entire duration of your case. We are a contingency-based law firm, so recovering your settlement award is the only way we get paid. If we don’t bring you compensation from an auto accident claim, you owe us absolutely nothing.

This is our promise to you, even if you transfer your case to us from another law firm. But first, we would like you to meet with us and learn about the ways we can assist you. That way, you can make an informed decision on whether to start a car accident claim or continue an existing lawsuit with one of our attorneys.

We are here for you 24 hours a day, 7 days a week, so contact our law firm to schedule a free case evaluation or free second opinion.

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