Accidents cost trillions of dollars a year. That’s a lot of zeros. But as a business of one and a self-employed worker, how much would an accident cost you personally? What else do you need to be aware of when a fluke accident sidelines you for days, weeks, or longer? Some studies estimate it could run into the tens of thousands of dollars. But what’s the true cost of an accident?
What’s in this article
- How much do accidents cost?
- How much do accidents cost you?
- What are the hidden costs of accidents?
- How can you protect yourself from accidents?
How much do accidents cost?
Accidents and the injuries that result from them carry a huge price tag. The National Safety Council estimates the total cost, including loss of quality of life, at $7 trillion.1Another study suggests a slightly lower number at $4.2 trillion.2These numbers combine the cost of a few things, including the price of medical care and losses related to work and quality of life.
How much do accidents cost you?
The personal cost of an accident and injury can cost tens of thousands of dollars. The National Safety Council estimates the price tag for a medically consulted work injury (aka when you’re hurt enough to have to see a doctor) is $42,000.3This number includes personal costs like lost wages and medical treatment but also costs to employers and society.What are the hidden costs of accidents?
If you’re an independent worker and get hurt in an accident, you’ll face many different costs.There are obvious first ones: the trip to the doctor or emergency room, the price tag of any medicine you’ll need. Then there are the less obvious ones that crop up later: higher childcare costs, lost wages, and dings on your credit if you run behind on bills.
There is a lot to consider.
Lost Wages
This is perhaps the most obvious, especially for anyone self-employed. If you don’t work, you don’t get paid. But no one expects to be out of work for extended periods.
How long would you expect to be out? It depends on your injury. But the median number is eight days away from work, according to government data.4
If you’re an independent worker, that will typically mean you’ve lost out on about $1,400 in wages (Note: this will vary depending on what you usually make).5
Missed Mortgage and rent payments
Missing work and not getting a paycheck could affect a lot of things in your life, especially if you’re self-employed. One big one would be your ability to pay off your mortgage or rent. Missing those payments can lead to several things:
- Late fees
- Credit score drop
- Eviction
- Foreclosure
It can also affect your ability to rent a home in the future or borrow from a bank.
For reference, the national average for mortgage payments in 2021 was $1,672 and rent was $1,838, according to the government and a Harvard University study.67
Medical Bills
When you get hurt, you’ll likely end up going to urgent care or an emergency room to triage any pain you might have. But if your injury lingers and lasts more than a few days, there’s a chance you’ll have multiple follow-up visits to your doctor and specialists. For example, someone who’s experienced whiplash would need several weeks, if not months to fully recover.8
Don’t forget any medications you may need along with tests to see what’s going on in your body. Lastly, you may need physical therapy to complete your recovery.
Here’s a breakdown of potential costs for independent workers. Note: your costs could vary, depending on your insurance coverage:
- Average cost to visit urgent care: $20 to $150.9
- Average cost to visit the ER: $252 to 1,382.10
- Average cost to see a doctor: $130 to $205.11
- Average physical therapy visit: $80 to $400, depending on the provider and facility.12
- Average annual out-of-pocket amount spent on prescription drugs: $177.13
Drop in quality of life
The effect of an accident can linger way beyond any trip to your doctor or the emergency room. There are physical reminders of any wounds that may have happened. There’s lingering pain that can last weeks or months. If you’ve been involved in a car accident, you could experience mental issues like PTSD. Lastly, you may not be able to enjoy the things you once did because of the accident, especially if your body’s been permanently disabled.
All of these things can cause your quality of life to suffer.
Childcare Costs
Accidents don’t just affect you. They could potentially affect your family, especially if you have children.
If you’re unable to watch your children because of an injury, then you’ll have to find other ways to take care of them.
The nonprofit Child Care Aware of America estimates the average cost of childcare between $9,200 to $9,600 a year.14For self-employed workers who are injured, that could particularly hurt if you’re not able to make any money while out of work.
How do independent workers protect themselves from the hidden costs of accidents?
How do you protect yourself from accidents and their hidden costs? There are things you can do in advance that will give you the breathing room you need.Savings
Set aside money each month. Think of it as your what-if or emergency fund. This money will help you deal with any unexpected expenses, especially from accidents. It’ll also give you breathing room should you be unable to work and make any money from work.
Accident and disability Insurance
Look into insurance that pays you when you’re injured. This will help you make up for wages you’re not earning because you can’t work. One option is an accident policy, which will give you a lump sum, one-time payment. Another insurance to consider is an accident disability plan that will provide continued payments for several months. There are a lot of factors to consider when buying either one so make sure you choose the options that fit your needs and budget.
Health insurance
Just like your car needs insurance, you do too. You never know when something will go wrong and if/when you need it. Health insurance provides you financial security from the cost of big medical bills. It’ll also help you pay for your medication or doctor visits.
Next steps
For independent workers, the loss stings even more. Gig workers, contractors, consultants, and others who are self-employed have to largely rely on themselves to create a safety net. They don’t qualify for unemployment nor do they have access to other options available to others on employer-based plans (disability, workers compensation).
The other issue affecting independent workers and anyone who works as a 1099 is that they don’t get paid when they don’t work. There is no paid sick time to compensate when you get injured or hurt.
These are just a few suggestions for safeguarding yourself from the hidden costs of accidents. As an independent self-employed worker, it’s important to take extra steps to protect you and your family before anything happens.
Gig workers, contractors, consultants, and others who are self-employed have to largely rely on themselves to create a safety net. They don’t qualify for unemployment nor do they have access to other options available to others on employer-based plans (disability, workers compensation).
The other issue affecting independent workers and anyone who works as a 1099 is that they don’t get paid when they don’t work. There is no paid sick time to compensate when you get injured or hurt.
Make sure to consider your circumstances and needs before buying anything. And take time to re-evaluate them as well.
