A car accident is a disruptive experience to life and limb. As hard as it is to deal with the physical injuries of a car accident–which can include broken bones, head injuries or constant headaches from a sore neck–these injuries could also force you to miss work and the paycheck that comes with it.
Fortunately, lost wages are part of personal injury damages, and you can receive compensation for them when you file a car accident claim. Here’s a deeper look at lost wages and how you can recover them after a car accident.
[READ: How to Report a Traffic Accident to the Police]
What Is a Lost Wages Claim?
Lost wages are income that is lost due to injuries and inconvenience caused by a car accident. They include hourly, salaried and self-employment income.
Generally, a lost wages claim arises from missing work, which can happen when you are:
— Healing from serious injuries such as bone fractures, head trauma, severe emotional distress or paralysis.
— Not capable of performing your job, like a construction worker who suffers from a broken arm after an accident.
— Dealing with car accident details, like talking to adjusters or arranging car repairs, during the workday, or when you lack transportation to get to work.
Lost wages shouldn’t be confused with lost earning capacity or lost compensation. These are separate types of damages. Lost earning capacity refers to a diminished ability to perform your current job going forward, which may decrease your earning potential. Lost compensation, while it includes lost wages, also encompasses the loss of broader financial benefits from your job, like benefits and bonuses.
Lost wages can include sales commissions. Your commissions are a loss of income because they’re part of your hourly or salaried pay. For example, if you miss a big sales meeting because you’re in the hospital after a car accident, you can claim the loss of potential commissions.
How to Calculate Lost Wages
Determining your lost wages depends on how you receive pay. Here is a general overview of how a lost wages lawyer might address your income loss.
Hourly or Salaried Workers
These wages are straightforward. Generally, you keep track of the work missed and multiply those hours by your hourly rate. So, if you lost 20 hours and earned $30 an hour, your loss of earnings totals $600.
Salaried work is more complex. It starts by assigning an hourly wage to your salary. You can do this by using an online salary-to-hourly-pay converter. For example, a $60,000 yearly salary converts to $28.85 per hour, assuming you work 40 hours per week for 52 weeks.
You can also receive overtime compensation if you show a pattern of consistently working overtime. You can do that by presenting previous pay stubs that show your pattern of overtime work.
Self-Employed Workers
Establishing self-employment income is more challenging compared to hourly or salaried employment. Normally, you can prove this loss of revenue by showing business records before and after the accident, plus any diaries or calendars showing the days you missed.
You can prove lost income by contrasting profit and loss statements. Create one from the start of the year to the accident date and another from the accident date forward. The difference between these two can illustrate your loss of income.
More complex or nuanced businesses may require a forensic accountant to determine lost income and wages. For example, a self-employed artist who missed gallery showings due to injury may need a forensic account and an art sales expert to assess their lost wages due to a car accident.
Sales Commissions
Many salespeople receive a base salary plus commissions. Since commissions are part of salespeoples’ salaries, they are lost wages–unlike benefits or bonuses, which are more similar to job perks.
Again, these losses are often “might have been” scenarios, such as when a sale falls through due to a representative’s absence. But if another representative makes the sale and earns the commission, that can be the basis for a lost wages claim–if the accident victim can prove they would also likely make that sale.
Does Car Insurance Cover Lost Wages?
Car insurance can cover lost wages. It depends on what’s available to you on your insurance policy and that of the at-fault driver.
[Read: How Does Car Insurance Work?]
PIP Coverage
Personal injury protection (PIP) is coverage on your insurance policy that helps pay for:
— Medical expenses
— Lost wages
— Assistance at home, like childcare and housecleaning
— Funeral and final illness expenses
Generally, PIP coverage through your insurer is optional, except in the 12 states that are no-fault jurisdictions, where drivers must obtain compensation for a car accident through their own PIP policy, regardless of who was at fault. You likely already have this coverage if you live in one of those states, which include: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah.
However, PIP coverage for lost wages is limited. For example, a typical Washington state policy pays up to $200 weekly for income replacement, with upgrades up to $700 weekly if you pay an extra premium.
Personal Injury Claim
PIP can be a good filler if you have the coverage and are not currently earning any income. But you or your attorney are more likely to include lost wages from an auto accident in a personal injury claim against the at-fault party’s insurance.
The types of damages in a personal injury claim can include:
— Medical treatment
— Lost wages
— Lost compensation
— Lost earning capacity
— Emotional trauma
— Property damage
— Pain and suffering
Your lost wages are part of a demand package that itemizes all damages and organizes evidence to make it easier for an insurance adjuster to understand the expenses and suffering you faced due to the accident. When the insurance company makes a settlement offer, that offer should include your lost wages claim.
Your case may go to trial if you do not receive a fair settlement offer. Then, a judge or jury determines whether your claim is valid and, if so, a recovery amount considering all of your damages.
Other Sources of Coverage for Lost Income
You may have to pursue other sources of insurance coverage for your lost wages. Thankfully, there are a few different types of coverage that could apply, such as:
— Underinsured/uninsured coverage: If the at-fault driver was insured or didn’t carry enough coverage to cover your damages, you will collect from your underinsured/insured coverage on your policy.
— At-fault driver: If neither you nor the at-fault driver carry adequate insurance coverage, you may need to pursue the at-fault driver personally. If you prevail in your claim, you can collect lost wages and other damages from the at-fault driver’s assets. Ultimately, this path only works if that driver has personal assets in the first place.
— Workers’ compensation: Workers’ compensation covers lost wages if your injury happened at work. The test for this is whether you were on the clock during the accident. In some cases, you can pursue workers’ compensation and a personal injury claim, but you must discuss that with an attorney.
How to Claim Lost Wages in a Car Accident
You file a lost wages claim when you file your insurance claim with the at-fault driver’s insurance. When you do so, you need to provide information such as:
— Job title
— Date of hire
— Hours you usually work each week
— Pay rate
— Typical overtime hours
— Overtime pay rate
— The days and hours missed
— Commission structure (if relevant to your job)
Your employer can provide a statement of the work and wages lost, plus describe any potential commissions you couldn’t earn due to your absence. Other helpful evidence includes pay stubs, bank statements and tax returns.
Provide tax returns and profit and loss statements before and after the accident for self-employed wage claims. Your accountant can produce those statements.
Also, claiming lost wages from a car accident without injury is legitimate. Even if you weren’t injured, you likely lost time from calling insurance companies, arranging for car repairs or, in total loss cases, taking time from work to replace your car. If the accident left you without transportation and you missed work, those are also lost wage damages.
Need a Lost Wages Lawyer to Help You Get Compensated?
Dealing with the aftermath of a car accident can be time consuming, especially when calculating lost wages. Thankfully, you don’t have to go it alone. An experienced attorney can show you how to claim lost wages after a car accident so you can get the compensation you deserve
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Recovering Lost Wages for a Personal Injury Claim originally appeared on usnews.com
