An accident—whether it’s a car crash, slip and fall, or workplace injury—can turn your life upside down. While your physical and emotional recovery should be the priority, it’s equally important to know how to handle the financial aftermath. This guide walks you through who to call, what to document, how compensation works, and how to make the most of any money you receive.
And if you want to go even deeper, don’t miss this week’s new episode of CAPitalize Your Finances, where we break this all down—step-by-step—so you’re not left guessing when life throws the unexpected your way.
Step 1: Talk to the Right People, in the Right Order
After making sure you’re safe and have sought medical attention, here’s who you should talk to:
Your insurance provider – If it’s a car accident or something covered under a home or renters policy, report the incident ASAP.
A personal injury attorney – Even if you’re not planning to sue, a quick consultation can help you understand your rights and what kind of compensation you might be entitled to.
Your employer – If the accident happened on the job, notify your HR department and file a workers’ comp claim.
Your financial advisor (or yourself, if you’re managing finances solo) – You’ll need a clear plan for how to handle any settlement, insurance payout, or unexpected expenses.
Step 2: Keep Track of Everything
Documentation is key. Be thorough:
Medical bills and reports – These will form the backbone of any claim.
Receipts for out-of-pocket costs – Transportation, prescriptions, medical devices, lost wages, and anything else related to the incident.
Photos and written records – From the scene of the accident and of your injuries.
Communications – Keep emails or texts with your insurance company or legal team.
This isn’t just about protecting yourself—it helps ensure you’re fully compensated for what you’ve lost.
Step 3: Understand Where the Money Comes From
If you receive compensation, it might come in one or more of the following forms:
Insurance payout – From your own policy or the at-fault party’s.
Personal injury settlement – If you work with a lawyer and file a claim or lawsuit.
Workers’ comp – Covers medical costs and a portion of your wages if you were injured at work.
Disability insurance – If you’re unable to return to work for a time.
It’s important to understand whether the money is taxable. Most personal injury settlements for physical injuries are not, but lost wages or emotional distress damages may be.
Step 4: What to Do With the Money
Once you receive funds, whether a lump sum or a structured settlement, don’t rush to spend it. Here’s what to consider:
Emergency fund – If you had to dip into savings during recovery, replenish it.
Pay off high-interest debt – Especially if medical bills racked up on credit cards.
Cover essentials – Rent, mortgage, food, utilities—keep your basics covered.
Invest or save the rest – Depending on your timeline, you might want to place funds in a high-yield savings account or invest them for longer-term use.
Consult a financial advisor – A professional can help you prioritize and avoid costly mistakes (like buying a flashy new car before you’re back on your feet).
Step 5: Plan for the Future
Getting through an accident financially can serve as a wake-up call. Consider:
Increasing emergency savings
Reviewing your insurance coverage
Getting short- and long-term disability insurance
Creating or updating your estate plan
Want to Learn More?
🎙️ This week on CAPitalize Your Finances, we walk you through everything above—and more. Whether you’re recovering from an accident or just want to be prepared, this episode is packed with real-life tips, common mistakes to avoid, and financial strategies that work.
Listen wherever you get your podcasts—and get empowered, not blindsided.