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.
The answer to that question depends on a number of factors: Who was at fault in the accident? Were you driving the company vehicle within the scope of your job or outside of your duties? What kind of insurance does your employer have?
Let’s delve into the details of “vicarious liability.”
Q: What is legal nitty gritty?
A: The legal theory that applies to employees driving company vehicles is called “respondeat superior.” It means “let the master answer.” It’s also called vicarious liability. Those are fancy ways of saying that employers are responsible for their employees’ actions while they are acting under the scope of their employment.
When it comes to company vehicles, the “scope of their employment” means the employee is using the vehicle to drive to meetings or other off-site jobs, conduct deliveries, and perform other duties necessary to the position. This can even include company parties and picnics. Typically, the scope of employment does not include driving to and from work. But there are exceptions to that rule. Exactly what duties are included depends on the unique job description and employer-employee agreement.
If you were using the vehicle to run a personal errand during business hours, you would not be covered.
Q: What are the two types of work insurance?
A: Typically, two types of insurance come into play when it comes to company car accidents:
Workers’ compensation: This coverage compensates employees for medical bills, about two-thirds of lost wages, and out-of-pocket expenses. If the employee becomes disabled due to the accident, worker’s compensation will pay the employee a settlement. However, worker’s comp does not cover payment for pain and suffering.
Liability insurance: This coverage reimburses employees for injuries sustained by other drivers. It covers medical bills, out-of-pocket expenses, lost wages, and pain and suffering.
Q: What is covered in an accident?
A: If you were involved in an accident while driving your company vehicle, and the accident was partly or totally your fault, your company may be held liable. This means your employer’s insurance company may have to pay damages to the injured driver, passenger(s), pedestrian or cyclist. Damages include medical bills, lost wages, pain and suffering, and other out-of-pocket expenses.
Your employer’s insurance also protects you from being sued by the third party (the other driver or injured person). So you won’t have to pay damages yourself. Also, if the third party attempts to sue you, your employer’s insurance will also typically cover your legal fees.
If the accident was not your fault, you are entitled to damages from your company’s insurance policy and from the at-fault driver’s insurance policy. If the at-fault driver was not driving a company car but was driving under his or her own insurance, that driver’s insurance company will pay your medical bills, lost wages, pain and suffering, and out-of-pocket expenses.
However, typically you cannot collect, say, medical bill reimbursement from both worker’s compensation and the at-fault driver’s insurance company. So if you were reimbursed by your worker’s comp insurance, then sued the at-fault driver and were awarded damages including medical bills and pain and suffering, you would have to reimburse worker’s comp for what they paid you. But you could keep the amount for pain and suffering.
Q: What if you are driving your own vehicle for work?
A: If you have to drive your own vehicle for your job – for example deliveries – your employer’s insurance will probably not cover you. It is sometimes possible to purchase a “rider” from your insurance company that will cover you while you are using your vehicle for work. This will, of course, increase your insurance cost. However, it may be worth it if you use your car very often for work purposes.
Consulting with a personal injury attorney
Company vehicle accident cases can be complex. You may be dealing with two insurance companies, both of which are trying to give you the minimum reimbursement possible. Depending on the severity of the accident, a lot of money could be at stake. It is wise to consult with an experienced personal injury attorney to make sure you are acting in your best interest and that you receive the maximum compensation for your injuries. The Lamber-Goodnow Personal Injury Legal Team offers free, no-obligation consultations. We get paid only if you get paid.
Advice for employers
If you are an employer who requires employees to drive company vehicles, be sure to:
• Check potential employees’ driving history.
• Establish clear rules about the scope of the person’s duties as regards the vehicle.
• Enforce high standards in driving, for example forbidding employees from using cell phones or texting while operating the company vehicle. Some companies train employees in strict driving procedures, especially if they are expected to drive in hazardous situations.
• Forbid employees who drive recklessly from driving company vehicles again.
• Keep the company vehicles well-maintained.
For more employer guidelines on reducing company vehicle accidents (and your costs), visit the U.S. Department of Labor’s guidelines.