You’re driving home late at night when the driver behind you suddenly crashed his SUV into your car. Your vehicle’s rear is severely damaged and you had to be hospitalized for a broken leg. Because of your injury, not only did you incur a huge hospital bill but you had to miss work for 8 weeks without pay. So now you’re wondering how you can recover your lost wages from the accident.
What Are Lost Wages?
Lost wages refer to the income you would have earned from your job but were unable to because of your injuries from the accident. To claim lost wages, you need to establish a direct link between your injuries and the accident. What this basically means is you need to prove that the injuries you sustained were the direct cause of your inability to work. Car accident lawyer also dealing with the insurance.
If your lost wages claim is accepted by the insurance company, you will receive compensation equivalent to the wages you would have earned had you been able to work during your medical treatment and recovery periods.
Lost Earning Capacity vs. Loss of Income
You’ll come across terms like “lost earning capacity” and “loss of income” during the claims process. These are two different types of damages. Lost earning capacity relates to any disability that affects your ability to work and the ability to earn income indefinitely. This one is categorized as general damages and the courts will assess several factors to qualify you for lost earning capacity including your work history and location, education and profession, transferable job skills and current wage rates.
Loss of income also known as lost wages refers to the wages and other financial benefits you would have earned if the accident didn’t happen – your regular wages, bonuses and employment perks. So if you were unable to work for two months, you can seek compensation for the income you would have received during that time.
It’s important to note that severe injuries, including psychological ones like PTSD, can also warrant recovery of lost wages if they significantly impact your ability to work. And if you sustain a permanent or long-term disability as a result of the accident, which impacts your ability to earn, you could be eligible to recover damages for your lost earning capacity.
How to File a Lost Wages Claim
If you intend to recover lost wages after a car accident – as you should – here’s how you can go about it:
- Check your insurance policy to understand what coverage you have that covers lost wages. You may be able to submit a claim through your bodily injury coverage (if the other driver caused the accident), uninsured or underinsured motorist coverage (the at-fault driver is uninsured or have insufficient coverage) or your personal injury protection (PIP) coverage (only up to the policy limit).
- The next step is to submit your insurance claim. You’ll need to fill out an employment authorization form and then undergo an independent medical exam.
- The insurance company will also ask you to submit your medical records documenting your injuries and treatment.
Before submitting your claim, make sure that all information you provided is detailed and accurate to avoid getting your claim denied. You can also claim your family’s insurance who is fatally injured in a car accident.
How to Prove Lost Wages and Lost Earning Capacity
For lost wages, it’s important to present your most recent paycheck prior to the injury as this is the simplest way to establish your earnings. If you’re self-employed, attach evidence of your typical earnings like invoices.
In addition to paystubs, there are other documents that can strengthen your lost wages claim after a car accident:
- Profit-and-loss statements (for business owners / self-employed individuals)
- Invoices and receipts (evidence of the financial losses you’ve incurred due to the accident)
- Bank statements
- Finance-related correspondence (such as letters or emails discussing income or expenses)
You should also ask for a letter from your employer confirming important employment details such as the dates you were absent from work, your pay level or salary and the number of hours you work daily. This letter will serves as an official confirmation from your employer regarding the impact of the accident on your employment and income.
Proving lost earning capacity may be a bit more complex as it involves some degree of speculation about your future earnings. You’ll need to demonstrate the injury and its future impact on your earning potential.
You may have to tap on the expertise of a financial or economic expert witness to estimate what you would have earned without the injury. Moreover, getting testimony about your personal traits, work habits, educational background, and career intentions can help in calculating your lost earning capacity.