


The Hidden Costs of No-Fault Accidents: Why Victims Deserve More Compensation

Car accidents are an unfortunate reality for millions of drivers in the United States. While the insurance system is designed to help victims recover financially, the reality is that many drivers who are not at fault still face significant costs that are not covered.
When a driver is rear-ended, it is almost always the fault of the driver behind them. Yet, the victim is the one left dealing with the time-consuming process of getting their vehicle repaired, securing alternative transportation, and fighting for fair compensation. Even more frustrating, the accident can cause permanent depreciation in the value of their vehicle, which insurance companies do not reimburse.
With the rise of distracted driving, particularly from smartphone use, accident rates are climbing, making it more important than ever to address these hidden costs. If the law required at-fault drivers to compensate victims for lost time and vehicle depreciation, it could encourage people to pay more attention behind the wheel.
How Common Are Car Accidents in the United States?
Car accidents happen far more often than many people realize. According to data from the National Highway Traffic Safety Administration (NHTSA) and Insurance Information Institute (III):
- Total Crashes and Injuries: In 2022, there were 42,514 fatalities from motor vehicle crashes in the United States.
- Distracted Driving: In 2022, 3,308 people were killed in motor vehicle crashes involving distracted drivers.
With so many accidents happening daily, millions of drivers are put through the frustrating process of dealing with insurance claims, repair shops, and unexpected financial burdens—even when they weren’t at fault.
Why Victims of No-Fault Accidents Are at a Disadvantage
Many assume that if another driver is at fault, their insurance will take care of everything. Unfortunately, that is not the case. Even when the insurance company agrees to cover repairs, accident victims face multiple challenges, including time lost, depreciation of their vehicle, and long-term financial consequences.
The Uncompensated Time Burden
After a collision, the victim has to:
- Research and select an auto body shop, hoping the repairs will restore the car to its original condition.
- Contact the insurance company multiple times to get approval for repairs.
- Arrange transportation, whether through a rental car, rideshare services, or public transit.
- Follow up with the repair shop, potentially returning if the work is not done correctly.
This entire process can take 10 to 20+ hours of unpaid time. For someone with a full-time job or family responsibilities, this is a major inconvenience—yet insurance companies do not compensate for lost time.
Diminished Value: The Financial Hit No One Talks About
Even after a car is repaired, it may never be worth the same again. Services like Carfax and AutoCheck permanently record accident history, which lowers resale value.
For example, let’s say a vehicle had a pre-accident value of $30,000. Even with professional repairs, its resale value may drop to $27,000 simply because it now has an accident history.
For luxury or newer vehicles, this drop can be 10-20% of the car’s value, amounting to thousands of dollars in losses. Insurance companies do not reimburse for this loss unless the victim fights for a diminished value claim, which is difficult to win in most states.
Why the Insurance Industry Ignores These Costs
Insurance companies maximize profits by limiting payouts to direct repair costs. They routinely avoid compensating for lost time or depreciation because:
- There are no federal or universal state laws requiring them to do so.
- Time lost is hard to quantify, so they simply ignore it.
- Most people don’t know they can fight for a diminished value claim, so insurers rarely pay out.
This system works in the insurer’s favor but leaves accident victims at a financial disadvantage through no fault of their own.
How Distracted Driving Is Making the Problem Worse
The rise of smartphone use behind the wheel has made accidents more common. Despite laws banning texting and driving, many drivers still use their phones while behind the wheel. Studies show that:
- 660,000 drivers in the U.S. are using their phones at any given daylight moment, according to the NHTSA.
- Texting while driving increases the risk of a crash by 23 times compared to attentive driving.
- Hands-free technology does not eliminate risk—voice-to-text messaging still increases distraction and reaction times.
As more people drive distracted, rear-end collisions are likely to increase, making it even more important to address the unfair financial burden placed on accident victims.
A Call for Change: What Laws Should Be Passed?
The law needs to reflect the true cost of an accident, especially for those who are not at fault. Some potential reforms could include:
- Reimbursement for Time Spent Handling Repairs
- A standard hourly rate (e.g., $25-$50 per hour) for time spent dealing with repairs, rental cars, and insurance claims.
- This compensation should be automatically included in insurance settlements.
- Automatic Diminished Value Compensation
- A formula-based payout to cover lost resale value due to the accident.
- Compensation should be based on market depreciation trends and vehicle value before the accident.
- Penalties for At-Fault Drivers
- If at-fault drivers were held financially responsible for additional losses, they might pay closer attention on the road.
- This could work similarly to how higher penalties discourage drunk driving.
By implementing these changes, drivers would have a greater incentive to avoid accidents, leading to safer roads and fairer compensation for victims.
What Drivers Can Do Now
Until laws change, drivers can take steps to protect themselves:
- File a Diminished Value Claim – Some states allow victims to request compensation for lost car value. Check with DV Check for assistance.
- Use a Dashcam – Dashcams provide proof of fault, which can speed up claims. Nextbase and Garmin offer high-quality options.
- Get Uninsured Motorist Coverage – If the at-fault driver is uninsured or underinsured, this coverage can help offset losses.
Final Thoughts
The way the insurance system handles no-fault accidents leaves victims financially burdened and frustrated. Even when insurance pays for repairs, drivers lose time, money, and vehicle value—costs that should not fall on them.
As distracted driving continues to rise, it’s time for lawmakers to address this issue and create fair compensation policies. Accident victims should not have to fight for what they rightfully deserve, and holding at-fault drivers fully accountable could lead to safer roads for everyone.
