If you are injured in an accident that was partly or wholly the other driver’s fault, and you are unable to work as a result, you may be eligible to get compensated for lost wages.
There are several types of wage loss claims and conditions for filing. Let’s explore what you need to know.
Types of lost income claims
• “Lost wages” is the amount of income you would have earned for the time you were out of work following an auto accident. If you were in the hospital and physical therapy and were unable to work for two months, you would be entitled to receive two months’ worth of wages. If you used sick leave days or vacation time during your recovery, you are still entitled to your wages from that time period. This is because you were entitled to use those days at another time.
• “Lost earning capacity” applies if the accident caused you to suffer a long-term disability that prevents you from earning as much as you used to. This includes disabilities that prevent you from working as many hours as you previously did or performing certain duties in your field. It also includes a disability that prevents you from working in your field ever again. If you are unable to work in your previous career again, you may be entitled to lost future wages.
• “Lost opportunities” are career-related events or activities you missed because of your injuries, such as a job interview.
Filing for lost wages
It’s a simple process to apply for lost wages if you are a regular employee for a company or individual. Your boss can write a letter to the insurance company on your company’s letterhead. This letter outlines your position, rate of pay, number of hours you typically work, and the number of days you missed.
Filing for lost wages is trickier if you are sporadically employed or self-employed. In this case, you can gather invoices, contracts and payments received to show how much money you were earning in the months prior to your collision. Then you can gather similar evidence of the amount of work you did while you were recovering and calculate the difference. You might also show a calendar of appointments, emails, evidence of missed interviews or sales meetings, conference ticket receipts, and any other proof you had to miss work events after your collision.
If you work only occasionally, you can show a personal income tax return (or a few years of tax returns if your income is quite variable) to illustrate your average yearly income. You would then divide the average annual income into weeks or months to estimate how much you might have earned in the weeks or months you were recovering.
You will also need to send a letter from your physician(s) or have your physician(s) fill out your insurance company’s physician form. This will outline your injuries, treatments, medical bills, prescriptions, and how long your injuries prevented you from going to work.
In addition, you need to send a copy of the police report about the accident.
Necessary insurance policies
In order to collect lost wages, your auto insurance policy (or the at-fault driver’s insurance company) must cover lost wages. Typically you can be compensated for lost wages if:
• You were injured by another driver and submit a claim with the at-fault driver’s insurance company for liability bodily injury. Note that the driver must have liability bodily injury coverage.
• The at-fault driver was not insured but you have uninsured or underinsured motorist coverage. In this case, you can file a claim for lost wages (plus medical bills and out-of-pocket expenses) with your own insurance company.
• You have personal injury protection coverage, which pays for medical bills and lost wages without taking fault into account. This coverage is required in no-fault states but optional in other states like Arizona.
Check your insurance policy to see if it includes a line reading “Exclusion of Work Loss (included).” If so, your policy does not cover lost wages. This can happen if you chose to lower your insurance payments by reducing coverage. It’s a typical option with personal injury protection coverage. Because a debilitating accident can cause you to lose wages for a long period of time, it is best to keep lost wages coverage when selecting your insurance policy.
Filing for lost wages can be complicated. And depending on the severity of your injuries, a lot of money can be at stake. If you have been unable to work since your accident, especially if you anticipate long-term lost income, you should consult with an experienced personal injury attorney. He or she will better navigate the system and help you get the most lost wages compensation. The Lamber-Goodnow Personal Injury Law Team offers free, no-obligation consultations for accident victims. We don’t get paid until you get paid.