Key takeaway: Consider how to reduce your risks proactively and you can save a lot of time and money. Even when an accident happens, risk reduction techniques—like dash cams—can take away a lot of anxiety.
I was in a minor car accident a few weeks ago. I accelerated through an intersection on a green light while a driver ran his red light and T-boned my new car. We could get the cars off to the side of the road, but my driver's side wheel took the brunt of the hit, and I couldn't drive the car straight.
As we waited for the police and the tow truck to arrive, I thought about a little cardboard box sitting on my kitchen island. It had been sitting there for weeks. In it was a cheap dashboard camera I had ordered for my car after reading an article detailing the rate at which people lie about accidents.
I'm sure you've been through this or know someone who has. You're in an accident, no one stops to give a witness report, and it's your word against another's. You leave it up to insurance companies to battle on your behalf, but it always costs you. If only you had video footage to prove your innocence!
As advisors, we're always evaluating our clients' liabilities and considering how to hedge risks. There's a place for insurance, a place for outright avoidance, and in many cases an easy way to reduce risk. Dash cams are great risk reducers because you remove the uncertainty of fault in an accident.
Navigating the aftermath of an accident is never pleasant, but it is much easier when you can simply say, "Let me pull up the video." Police officers can file and close reports. Insurance companies don't have to spend hours taking statements and days to decide who was at fault. A dash cam is one of the cheapest ways to ensure peace of mind in a tumultuous situation.
But I did not have the dash cam installed. I spent the better part of the afternoon exchanging insurance information and filing a police report, calling a tow truck, and figuring out a rental. The driver who hit me was kind and helpful. He admitted fault immediately and promised he would call his insurance company to file a claim that day, and I had no reason to believe that he wouldn't be honest.
Later that afternoon I did receive a call from his insurance company so they could record my statement of how the accident took place. The claims representative asked about the weather (it had been raining), the flow of traffic (it was a very busy area), my experience with this intersection (I almost never take this route), and any distractions that were causing me to look away from the road (I did have the radio on). I admitted that I did not see his car coming until his bumper was through my driver's side door.
Once my statement was logged, the representative denied the claim and found me at fault for negligence. If I were paying attention, I would have seen him coming and avoided the accident. Without witnesses, they couldn’t be sure that I even had a green light. Again, I thought of that little, unopened box on my kitchen island and the headache ahead of me.
For the next several days, I fought with the driver's insurance company and got my own involved. I filed my own claim and let my claims representative go to bat for me, but I was still out my deductible and mired in a tangled web of “he said, she said.” Every expense I had incurred for the tow truck, the rental car, and two new car seats were all on me until it was settled, if it would be settled at all.
It took a few weeks to get my car back and for the driver's insurance company to pay out, which they did after a fight. Had I just installed that dash cam, I would have saved myself three weeks of time and effort.
I can't complain too much about the accident. No one was hurt, my children weren't in the car with me, and I was able to get my car back as good as new. But now I know from hard experience that we should protect ourselves beyond fastening our seat belts. Accidents are par for the course if you're going to take the risk of getting behind the wheel, so save yourself the hassle and buy a dash cam. Just make sure you install it.
Ashley Reiter, CFP®, is an Associate Wealth Partner who thinks of financial planning as a map that helps people reach their goals. Outside of work, she enjoys time with her family, friends, and two rescue dogs.
The opinion of the author is subject to change without notice and must be considered in conjunction with relevant regulation, as well as subsequent changes in the marketplace. Any information from outside resources has been deemed to be reliable but has not necessarily been verified. Each individual has unique circumstances to which this information may or may not be relevant. Under no circumstances will this information constitute an offer to buy or sell and it does not indicate strategy suitability for any particular investor.