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Lost Wages

After an auto accident, you may sustain injuries or disabilities that prevent you from working in the same capacity or altogether. As a result, you may lose out on certain benefits, i.e. pay raises, bonuses, etc. Therefore, several states allow you to pursue compensation for lost wages resulting from auto accidents. 

Define ‘Lost Wages’

‘Lost wages’ refers to the money you would have made working at your job from the date of your accident to the date of your settlement. However, you must be able to prove that these injuries resulted from an auto accident; otherwise, you cannot pursue this type of compensation. Lost wages can also compensate you for the hours of work you missed to receive treatment for your injuries.

‘Lost Earning Capacity’ v.s. ‘Lost Wages’

You can pursue compensation for both ‘lost earning capacity’ and ‘lost wages’, though the definitions of these terms can overlap, they are not the same. Lost earning capacity means the injury(s) or disabilities that resulted from the accident diminished your ability to complete your work; or prevents you from working normally. 

Comparatively, lost wages refers to the money you would have earned if you continued working (this can include potential pay raises, bonuses, perks, etc.). You can also receive compensation for previous injuries that were aggravated as a result of the accident. However, these compensations only apply for lost wages if your pre-existing conditions now prevent you from working.

How to Make a Claim for Lost Wages

There are several ways that you can receive compensation for your lost wages. If you were at-fault for the accident, or the at-fault driver doesn’t have sufficient insurance, you can file a claim with your auto insurance company. However, your ability to file this claim will depend on the insurance policies you have purchased. For example, if you are at-fault and only have liability insurance, you will not be able to pursue compensation from your insurance company.

Alternatively, if you live in a no-fault state, you will have access to Personal Injury Protection Insurance (PIP). PIP can provide compensation for lost wages, medical treatment, and in some states, funeral expenses. However, all PIP claims will be filed through your insurance.  

You can also request compensation from the at-fault driver’s liability insurance policy. If the at-fault driver doesn’t have insurance, you may file a claim with your insurance if you have underinsured or uninsured motorist coverage. Alternatively, you can pursue the at-fault driver in a lawsuit to receive compensation. 

What Will You Need to Submit a Claim for Lost Wages?

To submit a claim for lost wages, you will need to undergo a medical exam and submit supporting documentation. This documentation includes medical release forms; a note from your doctor stating your inability to work; proof of your lost wages; and an employment authorization form. The latter will allow your employer to provide information about your employment to the insurance company.

How to Prove Your Lost Wages

You will need to attach the following documents to support your claim.

  • Doctor’s note
    • This note must contain the doctor’s recommendation(s) regarding your working ability or excusing you from work altogether due to your injuries.
  • Paystubs
    •  Submit your most recent pay stubs prior to the accident. If you cannot access your pay stubs, you can submit your W-2’s from the previous year.
  • Supporting letter from your employer 
    • This letter needs to contain the date(s) of missed work, your pay level, and the number of hours you typically worked per pay period (prior to injury). 

Can I Recover Lost Wages if I’m Self-Employed?

You can still receive compensation for lost wages and/or lost earning capacity if you are self-employed. However, this process can be more complex compared to the process experienced by the average W-2 employee. As independent contractors’ income often fluctuates, you’ll need to gather documents that not only show you have lost income but that also proves how much earning potential you have lost due to your injuries. For example:

  • State and Federal income tax returns from the prior year
  • 1099’s and other tax reporting forms
  • Proof of the contracts and projects you were unable to complete due to injury
  • Proof of canceled appointments
  • Bank statements

Were you or someone you know involved in a recent auto accident? Call Auto Accident Care Network now at 801-683-1948 to connect with a live care advocate. Our team at AACN can connect you to trusted attorneys and doctors to schedule a free legal consultation, a free thirty-minute massage, and a no-cost medical exam!

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