A recurrent theme on this website concerns the time and difficulty associated with obtaining all of the potential benefits one is entitled to when injured in a crash. In Chapter One we discussed property damage and temporary substitiute vehicles.
Today we talk about lost wages or loss of income earning opportunities. Insurance carriers seem to hate paying lost wages and often make onerous requirements for self-employed people the rule. Be ready to provide tax returns, 1099's, W-2's and employer documentation.
There are two phases of obtaining lost wages, the first occurs while the injured victim receives medical care and convalesces and the second is in the scheme of settling the claim or lawsuit, against the at-fault driver.
There are several potential sources of compensation for lost time from work. The easiest is using PTO in the form of sick leave or annual leave from one's employer. Obviously, not all employers have PTO and often the amount of PTO is insufficient to cover the entire period lost from work. Nonetheless, PTO is very important and should generally be the first place one looks for lost income.
Some clients worry that they won't have PTO later if it all is used up because of being in a crash but two factors mitigate this somewhat. First, PTO means you get paid which is important in keeping food on the table and a roof over one's head. Second is that because of something called the " collateral source rule" you will generally get paid for the time lost from work in your settlement even though your emplyer paid you through PTO.
This may seem like a double recovery but if you are compelled to use up your leave because you are the victim of a car or truck accident, then the at-fault driver has deprived you of your earned PTO which you could otherwise have used for the flu or covid or a much needed vacation.
A second source of potential compensation for lost wages is so-called PIP or Personal Injury Protection coverage. This insurance benefit used to be required but the insurance industry hated it because it cost them money even if their insured was at fault and state regulators didn't allow them to charge their insureds very much for it.
Thus the insurance adds " only pay for what you need" means we can sell you a little bit cheaper policy if you forego PIP, which really in the scheme of things benefits you but costs the insurance company money. If you don't have PIP or PTO you aren't going to get paid lost income while you get well.
The second phase of lost income compensation occurs when either you settle your case or take it to trial. If you are being paid cash and are not reporting your income this may preclude your making a lost income claim in all but a limited number of circumstances.
If you do report your income, then tax returns, W-2's and pay stubs are used in conjunction with employer records to arrive at an accurate estimate of what sort of lost income you should be awarded. The mere fact that you didn't work is not enough however. You must submit medical support that you either couldn't work at all or that your physical limitations precluded your work at your particular trade.
There are many facets to lost income that need to be considered and the advice of an experienced attorney can be invaluable.