Even if you are extremely frugal with no debt, wealth that you have worked so hard for your entire life can be lost in various ways, among them:
- a natural disaster
- a medical emergency
- an ugly divorce
- a court judgement arising from a lawsuit.
Here’s how the story went…
SANDWICHED BY TWO CARS
It was a clear and sunny morning, in the spring of 2013, I was driving along the highway towards work at probably around 55 to 65 miles per hour when the car in front of me suddenly stopped. It was so abrupt that even though I was comfortably 6 to 8 car lengths away when I first hit the brakes, I still couldn’t avoid the accident (and I did try to hit the brakes hard!). Seconds later, I was rear-ended by the car behind me.
NOBODY GOT HURT
Fortunately, none of us got hurt. Everyone got out of their respective cars unscathed. The other 2 drivers, both in their early 20s, even shook their hands. It turns out that they happen to know each other as they worked in the same restaurant a few years back.
It’s so obvious that none of us got hurt that nobody even bothered to call an ambulance.
Should one of us got hurt it would have been me. My car was sandwiched between bigger and heavier cars, and I’m the oldest driver, the one having the brittlest bones among the three.
Don’t get me wrong. I know that whiplash injuries are real and that they can sometimes manifest days or even weeks after the accident. But I do know that I didn’t hit the car in front of me that hard. It had no visible damage whatsoever, as far as my bare eyes can tell.
THE POLICE REPORT
The traffic policeman came, quickly investigated, and wrote the police report. The driver behind me and I were given traffic citations for driving faster than conditions warrant, presumably because we were the ones who hit the cars in front of us.
I probably hit the car in front of me at 10 miles per hour. The car, a relatively new sport utility vehicle (SUV), did not sustain any visible damage, it seemed to me. The police report states that it has minor paint scratches. This is not surprising because I was driving a small subcompact car, a Prius C hybrid, which I bought just the year before this accident.
When the traffic citation came over the mail, I decided to just pay the $130 fine and not contest the ticket. I figured it’s not worth the trouble and it would have been difficult to prove otherwise. Anywhere you go, you are presumed guilty if you happen to rear-end the car in front of you. Besides, the report states that everyone is fine and there were no injuries.
THE DAMAGE REPORT
My car wasn’t as lucky. It absorbed all the energy from the impact (modern cars are designed this way). It had sustained $13,000 worth of damages, at least according to the collision shop responsible for the repairs, brought forth by the front and rear impacts. Part of the reason why it sustained that amount of damage is because of the bumper incompatibility between my car and the SUV- mine is much lower height in comparison. Amazingly, I managed to drive the Prius back home, after the accident, without being towed after the rear left wheel had been replaced with a donut.
Since my car was less than a year old, it was never declared as totaled; it’s much cheaper for my insurance company to shoulder the repairs than to pay for the replacement cost. With the Prius C having been in the market for barely a year, the bright side is that car parts will be replaced with original equipment manufacturer (OEM) parts.
Since I’ve chosen to have a high deductible in my policy, I had to pay my insurance $1,000 before they can do the repairs. I was reimbursed $500 because the other driver who rear-ended my car was also at fault. Of course, this is peanuts compared to paying for the repairs yourself.
I wasn’t surprised of the lawsuit because I was warned by my insurance carrier months before. But the above made me laugh. Her ambulance-chasing lawyer probably tried very hard to put as much medical lingo in there to make her ‘injuries’ appear very serious.
I wasn’t at all worried. Why should I? My auto insurance policy provides coverage in the amount of $250,000 per person and $500,000 per occurrence for bodily injury. The chances of me paying out of pocket is very low:
I went to the event in a suit and tie and shook hands with the stenographer and the other drivers’ lawyers. Once seated, her lawyer immediately asked questions, one after another, hoping that I make a mistake. Among the questions asked:
Q. Did you apologize to her for hitting her?
A. I don’t — No.
Q. Have you ever apologized to her for hitting her?
Saying ‘Yes’ would have been tantamount to an admission of guilt. I would never apologize to her. Normally I would, but this is an exception. She’s maliciously suing me for financial gain. Besides, she’s the one who stopped abruptly. Under no circumstances was I tailgating her before the accident happened.
My deposition probably took an hour. To be honest, I enjoyed the experience mostly because all I had to do is to tell the truth. When it was her turn to give her testimony, I left following the advice of my lawyer.
Hers probably took the rest of the day. Her transcript was four times as long as mine as she was bombarded with questions about the extent of her injuries. It was full of lies she made Richard Nixon an amateur in comparison. I guess that’s needed if you’re wishing for a huge settlement from the jury.
I hope she puts the money to good use (a significant portion will probably go to her lawyer’s bank account). Paying all her debts is a good starting point. It seems she spends more on things that she cannot afford. A 20-something working 2 jobs probably won’t be able to afford a brand new SUV.
There are many lessons that can be learned from the accident.