Injured in a car accident and cannot work for weeks or months? Should you receive compensation from an insurance company?
Depending on what you do for a living, it can be very hard or even impossible to go back to work after a serious car accident. Many victims spend weeks or months recovering from the initial trauma and undergoing painful rehabilitation and physical therapy. While many white-collar jobs come with short and long-term disability benefits, the majority of American workers do not have such policies. Just thirty-nine percent of workers in the private sector had short-term disability benefits and only thirty-three percent had long-term disability insurance in 2014, according to the Bureau of Labor Statistics.
The term “lost wages” refers to the money you would have earned had you not been laid up do to an injury. A car insurance policy may include “lost wages” coverage, which could cover up to three months of lost wages and other monetary gains from your job, depending on your plan. Thus, it is imperative to get the assistance of a knowledgeable lawyer to navigate the potential coverages in your policy. These benefits may be available regardless of who is at fault for the collision.
Lost wages
If there is not a specific “lost wages” clause in your car insurance policy, such damages may be encompassed in other policy provisions. Those include:
-Bodily injury coverage. This policy provision can cover either your injuries or another person’s injuries in the event of an accident. Such damages may include loss of income with the traditional medical coverage and insurance for pain and suffering. Limits are typically set as $25,000 if one person is injured and $50,000 if more than one person is injured, according to insurance company Liberty Mutual. Most states require a minimum coverage, but the limit you purchase may not cover the total expenses or loss of income in the event of an accident.
-Uninsured/underinsured motorist coverage. In the event that the other person in the accident is uninsured, this clause can provide you with coverage for bodily injury, emotional distress, medical expenses and lost wages. At least 22 states and the District of Columbia require the coverage, according to insurance company Farmers Insurance.
-Personal injury protection (PIP) coverage. this coverage, which is required in some states that do not assign fault in an accident, can pay for up to 80 percent of the expenses arising from a collision. It Kansas, for example, this coverage comes standard with every auto policy. It is often easier to obtain PIP coverage than working through determining fault after an accident and filing a claim against the other person’s insurance, according to insurance company Nationwide.
Be mindful of policy exclusions. Where it may appear that coverage for lost income is provided, there may be other sections of the policy that limit the damages to actual medical expenses and which specifically exclude coverage for lost wages.
Calculating Wage Loss
Calculating lost wages is fairly straightforward if you work in a salaried position with a set hourly rate and number of hours per week. You may think it is as simple as multiplying your pay rate by the amount of time you missed. That formula works for determining “past” lost wages. However, additional work will be needed to compute future lost income. Medical opinions regarding the length of time it will take to get you back to work may be needed. Information from your employer may be required to verify the claim. Then, with that data, your lawyer will likely need to reduce the future lost income to “present value” – an amount of money that, if invested conservatively, will net you the same amount as if you were immediately back to work.
For workers without set pay or hours, or those who work on commission, determining wage loss can more difficult. Your lawyer will need information such as W9’s, tax returns from several years, and documentation from your employer to show the total amount of your lost wages. Keep in mind that the goal of establishing this element of damages is to leave the injured victim in the same financial position they would have enjoyed absent the crash.
After an accident, your lawyer can put together the documentation to file a lost wage claim with your insurance company or another person’s insurance carrier. A claim might require independent medical exams, medical paperwork and employment authorization forms, among other documents, to substantiate your claim, according to insurance company Progressive.
Lost Benefits
In addition to lost wages, you may be entitled to lost benefits after a crash. Along with not earning income, you may also be losing out on lost retirement contributions from your employer while out of work. You may be forced to cash in sick days or personal time in order to keep your job during your recovery. All of these are recoverable elements of damages when you are hurt in a collision. Your lawyer will work with your employer to make certain you are made whole with regards to all of your losses.
